Walgreens Boots Alliance to lay off 504 company employees as financial liabilities for opioid litigation and other legal cases pile up.
Earlier this month, the pharmaceutical giant settled a lawsuit with the city of San Francisco, agreeing to pay him $230 million for his opioid sales that contributed to the city’s drug crisis in the Bay Area.
Most of the cuts will be made at the drugstore giant’s headquarters in Deerfield, Ill., or at its Chicago office.
The layoffs represent about 10 percent of the company’s workforce.
Walgreens Boots Alliance employs more than 325,000 people, according to the company’s latest quarterly earnings report.
“None of these roles are based in our stores, micro fulfillment centers or call centers. We are grateful for the many contributions of team members who will leave our organization and are committed to supporting them as much as possible. during this transition,” spokesman Marty Maloney said.
Walgreens said it plans to cut its staff by about 10% as it streamlines operations and focuses on consumer-facing healthcare businesses.
Walgreens stock has fallen nearly 20% so far this year
Maloney denied that the layoffs were related to the company’s financial liabilities.
The company said during its March earnings report that it paid out $5.4 billion for opioid-related legal claims.
During the settlements, the company denied responsibility for allegations of its role in the opioid crisis.
Walgreens recently moved beyond its pharmacies to become a direct provider of medical care through Walgreens-backed VillageMD, which purchased Summit Health. The company contributed $3.5 billion to the purchase.
The transaction, valued at $8.9 billion, also involved an investment from Cigna’s Evernorth.
Last week, Walgreens challenged in federal court a $642 million arbitration award for health insurance provider Humana in a drug price fight. Walgreens called the sum “staggering.”
None of the 504 cut positions are based in its stores, micro outlets or call centers, a company spokesperson said.
CEO Rosalind Brewer said in a message to terminated employees obtained by the Chicago Sun-Timesthe layoffs were part of a series of measures taken by the company “to generate sustainable cost savings to help fuel investment for future growth”.
Brewer made no reference to the legal issues facing the company.
Brewer thanked workers for their contributions saying, “While difficult, these changes are necessary to streamline our business, unlock value and support our long-term growth. Together, we will continue to deliver on our vision to be the leading partner in reinventing local healthcare and wellness for all.
Redundant workers will benefit from counseling and mental health services available in the company. Workers with at least three years of service receive severance pay of two weeks per year.
Maloney said all affected employees will receive outplacement support.
Blog posts The Dismissal said workers with at least three years of service received severance pay of two weeks a year.
San Francisco’s reputation as a coastal gem has been left in tatters by worsening crime, drug and homelessness rates, though it remains home to tech billionaires
Addicts openly smoke drugs on the sidewalk in San Francisco’s Tenderloin neighborhood, where overdose deaths have soared in recent months
San Francisco saw a staggering 41% increase in drug-related deaths in the first quarter of 2023
The settlement with San Francisco came nine months after U.S. District Judge Charles Breyer in San Francisco said the pharmacy chain could be held liable for “substantially contributing” to an opioid epidemic that caused “widespread damage” in the city and was a public nuisance.
Breyer blamed Walgreens for its “15-year failure” to properly review opioid prescriptions and report possible misuse of the sometimes highly addictive drugs.
San Francisco City Attorney David Chiu called Walgreens’ settlement the largest awarded to a local government in years of nationwide opioid litigation.
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 that we lost”.
In a statement, Walgreens said it “disputes liability” but did not admit wrongdoing, but the settlement allows it to focus on patients, customers and communities. “Our hearts go out to those affected by this tragic crisis,” he added.
This graph shows the increase in positive urine tests for fentanyl among people receiving drug treatment in different regions of the United States. Millennium Health data is based on some 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 manage their pain.
Given its extreme potency, it has become popular among recreational drug users.
Overdose deaths linked to synthetic opioids like 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 United States in 2017 – a record driven by fentanyl.
It is often added to heroin because it creates the same high as the drug, with biologically identical effects. But it can be up to 50 times more potent than heroin, according to US officials.
In the United States, fentanyl is classified as a Schedule II drug, which indicates that it has some medical use, but has a high potential for abuse and can be psychologically and physically addictive.