CVS Health Corp. will lay off 632 employees based out of Rhode Island, including 80 state residents, as part of nationwide cuts. (Photo by Lynne Terry/Oregon Capital Chronicle, States Newsroom.)
More than 600 employees who work out of CVS Health’s Woonsocket headquarters, including 80 state residents, will lose their jobs in December, according to a notice filed with the Rhode Island Department of Labor and Training on Sunday, Oct. 6.
The local job cuts are part of mass layoffs affecting 2,900 employees nationwide, representing 1% of its total workforce, the company announced in September. The pharmacy giant’s board of directors has also discussed breaking up the company into separate retail and pharmacy units, amid ongoing financial pressures and changes to the health care landscape, as first reported by Reuters.
“Our industry faces continued disruption, regulatory pressures, and evolving consumer needs and expectations, so it is critical that we remain competitive and operate at peak performance,” Shelly Bendit, a CVS Health spokesperson, said in an email on Monday. “As we previously disclosed, we’ve embarked on a multi-year initiative to deliver $2 billion in cost savings by reducing expenses and investing in technologies to enhance how we work.”
Since news broke last month, the pending layoffs sent alarm bells ringing across northern Rhode Island, where lawmakers worried about the impact for residents and the local economy. How deep the cuts would hit Rhode Island remained unclear, until now.
Federal law under the Worker Adjustment and Retraining Notification Act requires companies to let state and town officials know about closures and mass layoffs at least 60 days in advance.
A majority of the 632 workers based out of CVS’ Woonsocket headquarters and surrounding campuses — 479 people — are remote employees, many of whom don’t actually live in Rhode Island, but are “assigned” to the facility, according to the letter from Erin Ridge, senior vice president of human resources. Roughly 80 Rhode Island residents, including in-person and remote workers, stand to lose their jobs with CVS as part of the pending layoffs, according to the letter.
As previously stated by the company, the cuts center on corporate-level positions, including a slew of Rhode Island-based executive directors for software development engineering, affirmative action, marketing, and pharmacy operations, among others. Front-line workers in pharmacies, retail stores and distribution centers are not affected.
“Before taking this step, we prioritized finding cost savings everywhere we could, including closing open job postings,” Bendit said. “Decisions on which positions to eliminate were extremely difficult and do not diminish the value that impacted colleagues have brought to the company.”
The company is also offering severance pay and benefits to workers who lose their jobs, Bendit said.
Layoffs will take place over a 14-day period beginning Dec. 8, according to Ridge’s letter, which was sent to state officials along with the mayors of Cumberland and Woonsocket.
Cumberland Mayor Jeffrey Mutter said he was caught off-guard by the news, having only a “cursory” understanding of the previously announced national layoff plans and potential company dissolution.
“This came out of the blue,” Mutter said in an interview Monday afternoon. “If there was any heads up, we certainly were not aware of it.”
Mutter pledged to work with local and state officials to help affected workers, and to talk to CVS executives about the future of the company in Rhode Island.
“Obviously that company has a longstanding relationship here in Cumberland and Woonsocket, which we think is important,” Mutter said.
Woonsocket Mayor Christopher Beauchamp did not immediately return inquiries for comment Monday morning.
Ahead of the letter, Rhode Island Rep. Stephen Casey, a Woonsocket Democrat, issued a statement on Friday, Oct. 4, stressing the need to offer services for residents who will lose their jobs.
“We are committed to ensuring that affected workers have access to retraining programs, job placement services and any available assistance throughout this challenging transition,” Casey said in a statement. “Our focus is on finding solutions that protect jobs in our state, support displaced workers and identify new opportunities for growth.”
Despite rumors of a company breakup, and potentially relocating headquarters out of Woonsocket, Casey said he was confident in state leaders’ economic strategy.
“Governor Dan McKee, Secretary Tanner, and the team at Commerce have been key in advancing policies that strengthen our business landscape,” Casey said. “I’m confident that working together, we will continue to maintain a strong business climate and position Rhode Island for continued success.”
The layoffs come on the heels of news that Pawtucket-based toymaker and entertainment company Hasbro may be looking to relocate across state lines in Massachusetts. State and local officials have scrambled to convince the top employer to remain within the state, though little detail about the internal discussions has been shared publicly.
Updated to include comments from a CVS Health spokesperson and Cumberland Mayor Jeffrey Mutter.
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