CVS to reduce office space by 30%

Feb. 17—CVS Health says it will shrink its office footprint by about 30% in response to the COVID-19 pandemic, which has ushered in an era of telecommuting and prompted greater investments in digitization measures.

During a conference call with analysts Monday, CVS Executive Vice President and CFO Eva Boratto said the planned reductions in real estate are part of broader changes in "workforce management," which also include improvements to technology systems and "productivity and operational efficiency initiatives for each segment."

Boratto did not say which specific offices might be scaled back or closed as part of the effort, and CVS representatives could not be immediately reached for further comment.

Hartford-based Aetna, part of CVS Health for over two years, could ultimately be shielded from major downsizing under the terms of an agreement with state financial regulators.

As part of its $69 billion takeover of Aetna in late 2018, CVS Health pledged to keep the 167-year-old insurer in Hartford for at least a decade and retain staffing levels of about 5,300 employees for at least the following four years.

Aetna did not escape the merger without some losses, however.

Last October, company officials announced plans to eliminate an undisclosed number of positions as part of its integration with CVS. The firm did not say exactly how many jobs were lost but did indicate that the total number did not meet the regulatory threshold that requires employers to provide advanced notice to the state Department of Labor.

CVS executives also used Monday's conference call to signal the conglomerate's return to the Affordable Care Act marketplace, which Aetna exited in 2018.

At the time, insurers were souring on the state-based exchange system because too few young and healthy people were signing up to offset the cost of covering older enrollees.

But CVS President and CEO Karen Lynch said the sector has course-corrected over the last three years.

"As the ACA has evolved, there is evidence of market stabilization and remedies to earlier issues," Lynch said. "It is now time for us to participate in these markets. We will show that we can bring great value to those who seek coverage."

CVS Health plans to officially reenter the ACA marketplace on Jan. 1, 2022.

CVS is one of two national pharmacy chains now administering COVID-19 vaccines to patients and workers in long-term care settings, such as nursing homes and assisted living facilities. The conglomerate will also play a role in distributing vaccines beyond those particularly vulnerable populations as part of a partnership with the federal government.

Lynch said the company has the capacity to administer between 20 million and 25 million doses per month, depending on supply.

Zach cover all topics that fall under business. His coverage can include openings and closings of local businesses, trends in unemployment, details of developments from major companies and utilities, and investigating the impact of state politics and regulations on the private sector. For more updates about business in north-central Connecticut, follow Zach on Twitter: @ZachVasileJI.

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