Walgreens is going to lay off more than 500 employees — 10 percent of its total workforce
Walgreens Boots Alliance to lay off 504 employees as financial liabilities for opioid lawsuits and other legal matters pile up.
Earlier this month, the drugstore giant settled a lawsuit with the city of San Francisco, agree to pay it $230 million for opioid sales that contributed to the drug crisis in the Bay Area city.
Most of the cuts will be made at the drugstore giant’s headquarters in Deerfield, Illinois or its Chicago office.
The layoffs represent about 10 percent of the company’s workforce.
Walgreens Boots Alliance employs more than 325,000 workers, according to the company’s latest quarterly report.
“None of these roles are based on our stores, microfulfilment centers or call centers. We are grateful for the many contributions of the team members who will be leaving our organization, and are committed to supporting them as much as possible during this transition,” said spokesperson Marty Maloney.
Walgreens said it plans to cut headcount by about 10% as it streamlines operations and focuses on customer-centric healthcare businesses
Shares of Walgreens are down nearly 20% year to date
Maloney denied that the layoffs were related to the company’s financial obligations.
The company said during its March earnings report that it had paid $5.4 billion for opioid-related legal claims.
In making the settlements, the company has denied any liability related to allegations of its role in the opioid crisis.
Walgreens recently moved beyond its drug stores to become a direct provider of medical care through Walgreens-backed VillageMD, which bought Summit Health. The company contributed $3.5 billion to the purchase.
The transaction, valued at $8.9 billion, also included investments from Cigna’s Evernorth.
Last week, in federal court, Walgreens challenged a $642 million arbitration award for health insurer Humana in a battle over drug prices. Walgreens called the sum “staggering.”
None of the 504 positions being cut are based on the stores, micro-fulfillment outlets or call centers, a company spokesperson said.
That’s what CEO Rosalind Brewer said in a message to employees who were laid off Chicago Sun Timesthe layoffs were part of a series of steps the company is taking “to drive sustainable cost savings to fuel investment for future growth.”
Brewer made no reference to any legal issues facing the company.
Brewer thanked employees for their contributions and stated, “While these changes are difficult, they are necessary to streamline our business, unlock value and support our long-term growth. Together we will continue to pursue our vision to be the leading partner in reimagining local healthcare and wellbeing for all.”
The laid-off employees receive counseling and mental health care in the company. Employees with an employment contract of at least three years receive a severance payment of two weeks per year.
Maloney said all affected employees will receive outplacement support.
Posts on the blog The Resignation said workers with at least three years of service were paid severance pay of two weeks per year.
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The San Francisco settlement came nine months after San Francisco U.S. District Judge Charles Breyer said the drugstore chain could be held liable for having “contributed significantly” to an opioid epidemic that caused “widespread harm” in the city and for public disturbance. took care.
Breyer blamed Walgreens for its “15-year failure” to properly research opioid prescriptions and spot potential misuse of the sometimes highly addictive drugs.
City of San Francisco attorney David Chiu called Walgreens’ settlement the largest awarded to a local government in years of opioid lawsuits nationwide.
He said Walgreens’ actions “have made the opioid epidemic in San Francisco worse than it otherwise would have been,” and that there is “no amount of money that will bring back the lives we’ve lost.”
In a statement, Walgreens said it “disputes liability” but has not admitted guilt, but that the settlement allows the company to focus on patients, customers and communities. “Our thoughts are with those affected by this tragic crisis,” it added.
This graph shows the increase in positive urine tests for fentanyl among those being treated for substance abuse in different parts of the US. Millennium Health’s data is based on approximately 4.5 million samples
What is fentanyl and why is it so dangerous?
Fentanyl was originally developed in Belgium in the 1950s to help cancer patients with their pain management.
Given its extreme potency, it has become popular among recreational drug users.
Overdose deaths related to synthetic opioids such as fentanyl rose from nearly 10,000 in 2015 to nearly 20,000 in 2016 – surpassing common opioid painkillers and heroin for the first time.
And drug overdoses killed more than 72,000 people in the US in 2017 – a record thanks to fentanyl.
It is often added to heroin because it produces the same high as the drug, with biologically identical effects. But according to US officials, it can be up to 50 times more potent than heroin.
In the US, fentanyl is classified as a schedule II drug, indicating that it has some medical use but has a strong potential to be abused and can cause psychological and physical dependence.