CVS Corporate Layoffs

[krogerclerk]

CVS has announced laying off 300 employees nationwide, 150 at its Woonsocket, RI hq and the rest in non-retail positions nationwide.

http://newsblog.projo.com/2010/10/cvs-c ... -empl.html

Is this a move to fatten profits or cutting costs as a result of absorbing Longs and its very different corporate culture and merchandising?

[Alpha8472]

CVS is a big corporation just like all of the rest.

For example, Wells Fargo. My friend works at Wells Fargo Headquarters and many employees in the building do practically nothing. There are many middle managers and other personnel that do very little work and simply collect a paycheck. This became even worse after the merger with Wachovia. Many executives and managers from Wachovia moved into the Wells Fargo building. They could fire hundreds of these middle managers and the company would still keep going.

CVS knows that if they layoff employees, that their stock price will go up. Layoffs make it look like the company is cutting costs and streamlining its operations. This is very common in the corporate world.

Life goes on. These few jobs are insignificant and are simply getting rid of dead weight to raise the company's stock price.

[storewanderer]

But all that deadweight is being paid, collecting a check, and spending the money thus putting it back into the economy. I'm not saying it is a bad thing to cut deadweight by any means; companies should not have a bunch of middle management that does little to nothing in the first place. But, if these people cannot find new jobs, and enough companies make these cuts, it is going to be very bad for the economy and especially the retail sector that counts heavily on discretionary income.

[krogerclerk]

All that CVS has said is it was laying off employees at the hq and field positions. Many companies do this by attrition, simply not filling a vacancy when it comes open, and offering early retirement and severance packages to tenured employees that voluntarily step down. Generally when a company overnight eliminates positions, it is due at best to trying to achieve a financial goal to appease Wall Street or to stave off losses. Often when employees are let go with such a short notice, many of the newly unemployed have lost their jobs because of losing favor in corporate politics, for example, a store manager gets promoted to field manager of OTC for Sacramento/Lake Tahoe district, then the district position is eliminated by being consolidated with the Bay Area district and the Bay Area district manager oversees the former district of the newly unemployed field manager. It wouldn't be unusual for a company like CVS to start letting go of middle management people from Longs, under the guise of consolidating, plus eliminating people who are versed in a different corporate culture. Not all such eliminations are dead weight per se, while Longs, Eckerd/Brooks, and Osco/Sav-on were separate companies from CVS, some of the positions were part of every day business.