Omnicare notifying workers of layoffs this week

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LOIS A. BOWERS

 @LOIS_BOWERS

JANUARY 30, 2024

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CVS Health President and CEO Karen Lynch

Cincinnati-based long-term care pharmacy provider Omnicare is announcing layoffs this week as a result of a review of operations “and other market dynamics,” a company representative told McKnight’s Senior Living.

Information on the number of individuals who will be affected and their locations was not disclosed.

“Omnicare regularly reviews its operations to help ensure we are continually providing the high level of pharmacy services and care our customers and residents expect,” CVS Health Executive Director of Corporate Communications Mike DeAngelis said. “As a result of this review and other market dynamics, we’ve made the difficult decision to eliminate certain positions within Omnicare.”

Omnicare, which serves senior living communities, skilled nursing facilities and Programs of All-Inclusive Care for the Elderly, is a business unit of Woonsocket, RI-based CVS Health, which in August 2023 said that it would be laying off 5,000 employees. “These efforts are expected to generate over $600 million of run rate savings beginning in 2024,” CVS President and CEO Karen Lynch said at the time. The company did not specify then whether any of those layoffs would be occurring at Omnicare.

CVS is seeking to sell its long-term care pharmacy business, which in November 2022 Lynch said “was no longer a strategic asset” for the company. In November 2023, however, CVS said in a filing with the Securities and Exchange Commission that the sale of Omnicare wasn’t expected “in the near term.”

Tuesday, DeAngelis said that Omnicare employees affected by the layoffs are being notified this week.

“They will have an opportunity to apply for other positions at CVS Health for which they may be qualified and will receive prioritized consideration,” he said. “Colleagues who are not placed in other roles will be eligible to receive severance pay and benefits, including access to outplacement services.”

Omnicare, DeAngelis said, will “remain committed to delivering best-in-class operational performance, clinical services and financial offerings to our long-term care customers and residents.”

CVS acquired Omnicare in 2015 for $10.4 billion plus the assumption of $2.3 billion in Omnicare debt, according to published sources.

CVS reported a $2.5 billion loss related to the long-term care pharmacy business in the third quarter of 2022, and in the first quarter of 2023 recorded a $349 million loss “to write-down the carrying value of the LTC business to the Company’s best estimate of the ultimate selling price which reflects its estimated fair value less costs to sell,” the company said in an SEC filing.