Health care giant to slash thousands of jobs, some of them likely in CT

CVS Health Corp. said Monday it will slash another 2,900 jobs nationwide, most of them corporate jobs, with some of the layoffs likely to take a toll on the Hartford-based headquarters of health insurer Aetna, which CVS acquired in 2018.

The layoffs in Harford would come on top of 336 in the city last year and are part of a massive plan, launched in August, to cut $2 billion in expenses and invest in technology in the next several years. CVS cut 5,000 jobs nationally in 2023.

Health care giant CVS Monday declined to specify the number of layoffs planned for Hartford but indicated those job cuts would be reported to the state, likely next week. In a statement, CVS said the “vast majority of impacted colleagues will be notified this week.”

The job cuts nationally would be less than 1 percent of the 300,000 employees Woonsocket, R.I.-based CVS has across the country. The employment in Hartford was not immediately available.

No timetable was disclosed for the when the layoffs would be effective.

The job cuts will likely stoke fresh worries over the future of Aetna’s sprawling complex on Farmington Avenue in Asylum Hill. The Colonial Revival style edifice, built in 1931, encompasses nearly 2 million square feet.

“It’s an iconic building,” David Griggs, chief executive of the MetroHartford Alliance, the region’s chamber of commerce, said. “It’s extremely well-built infrastructure-wise, with a parking garage. It’s a fantastic building that we want to make sure Aetna continues to own, operate and use to the fullest. Anything that can be done to help with that, obviously, we want to make sure we able to do.”

When CVS acquired Aetna, it agreed to keep Aetna headquartered in Hartford for at least a decade, a milestone that will be marked in 2028. A companion agreement with Connecticut insurance regulators included a promise to keep employment at Aetna and its subsidiaries at 5,300 for at least four years. The four years ended in 2022.

CVS has grown into a health care giant with its massive chain of pharmacies, health insurance, Medicare-focused physician care in neighborhood clinics and a pharmacy benefit manager. PBMs manage drug plans and influence medication prices and distribution.

But in August, CVS cut its full-year outlook for profits and launched a new plan to cut the $2 billion in costs, with rising costs at Aetna’s Medicare business a particular concern. CVS’s PBM, along with rivals Cigna and UnitedHealthcare, recently were sued by the federal government over the cost of insulin.

Also in August, CVS said Aetna President Brian Kane, the most senior executive at CVS for insurance, would leave the company immediately, after less than a year on the job.

The Wall Street Journal reported Monday that senior executives from CVS Health are meeting with top officials of Glenview Capital Management, a hedge fund investor. Glenview’s founder, Larry Robbins, owns about 1% of CVS’s outstanding shares, according to The Journal. Robbins and Karen Lynch, chief executive of CVS Health, will discuss ways to improve operations, The Journal reported.

In a statement, CVS said the health care industry faces “disruption, regulatory pressures and evolving consumer needs and expectations, so it is critical that we remain competitive and operate at peak performance.”

With that goal in mind, CVS will embark on a new round of layoffs, which the health care company said would not affect front-line jobs in our stores, pharmacies and distribution centers.

“Before taking this step, we prioritized finding cost saving everywhere we could, including closing open job postings,” the statement read. “Decisions on which positions to eliminate were extremely difficult and do not diminish the value that impacted colleagues have brought to the company.”

CVS said employees losing their jobs will receive severance pay and benefits, including access to outplacement services.

Kenneth R. Gosselin can be reached at [email protected].

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