Walgreens (WAG) Provides Update on 'Rewiring for Growth' Initiative; to Cut 1,000 Employees from Headcount
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Walgreens (NYSE: WAG) today announced it is offering early retirement and severance programs to employees in corporate and field management positions as part of its Rewiring for Growth initiative.
Approximately 1,000 positions (about 9% of those currently employed in corporate and field management) will be eliminated by the combination of voluntary and involuntary programs in fiscal 2009. These programs will not impact store personnel.
Rewiring for Growth is one of the company’s key strategic initiatives designed to leverage the value of its core businesses - to earn “more from the core” for its shareholders.
To reduce overhead, including the number of people employed in corporate and support roles, Walgreens is enabling eligible employees to voluntarily resign or retire from the company with both severance pay and benefits coverage based on years of service and retirement eligibility. This program is being offered in advance of a supplemental involuntary separation program that will begin in February. The company intends to reduce to the extent possible the number of involuntary separations by offering a more favorable voluntary program first. Under the voluntary program, eligible employees can receive more weeks of severance pay and continuation of retiree medical benefits if they meet certain age and service requirements.
Gregory Wasson, Walgreens' President, said, "Our Rewiring effort is finding ways for Walgreens to be more effective and efficient so that our growth strategy can move forward"
In its entirety, Rewiring for Growth targets $1 billion in annual savings by fiscal 2011. The company will achieve savings through:
- strategic sourcing on indirect spend (all goods not for resale),
- reduction in overhead and labor,
- and the POWER project, which is designed to enhance patient-pharmacist interaction while reducing costs.
Walgreen Co. operates a chain of drugstores in the United States.
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Wow...
I agree with YeaRight's comments.... Walgreen is a one big bad boy of a corporation that puts up a face of "four way test" but continues to fail the "Walgreens Creed." Mr. Walgreens is probably turning up in his grave, right about now!
Incompetent Leaders!
Wag promotes nepotism and favors "who you know not what you know" strategy in running its business. Just look how well CVS has done in the last 6-8 years in the Chicago Market. They are kicking WAG's ass because they hire and promote individuals who are qualified and experienced in what they are responsible for. WAG has made strategic mistakes and continues to acquire small businesses but has no competency or leadership in place to integrate those entities. For example, they bought OptionCare for 850MM. When they acquired it, they announced that we are acquiring OptionCare for it's expertise in Home Infusion Business and we value the management team that is going to integrate Walgreen's failing HI business into OptionCare's successful strategy. From an insider's perspective... in less than six months all of OptionCare's VPs, and Directors left the company or (in some cases were let go to promote, once again WAG cronies who had no experience in the home infusion arena!) Not only that WAG integrated it's failing business strategy of HI in OptionCare's operations, instead of really following through what they announced on the analyst call "We are buying OC for it's expertise." Then why the hell didn't you use it!! Go figure! WAG is on it's way DOWN. You can only cover lies, unethical promotions, nepotism, hibernation of incompetent people for so long... GO CVS!
Rewiring=Corporate Greed
This is just another glossed over term. America has become so fake and cheezy. Avoiding genuine responses and replacing them w/ snazzy terminology which means nothing. "Rewiring" please, it's just another corporate suckhole justifiying their own greedy existence. CVS or the next big thing who is smarter and more forward thinking will pass up these dinasours.
pay cut (Rewiring for Personal Adjustment)
Being a 20 year employee and investor in Walgreens, I find myself Blessed to have a full-time job, but wondering just how I am going to survive paying just Basic Monthly Bills, after recieving an over $5000.00 a year pay cut. I understand the economics of it and the outstanding savings in operating costs Walgreens will make in this cut( consider over 12,000 asst. mgrs x $400.00 a month = $4,800,000.00) and this is a very conservative figure. I am wondering how I and many other asst. mgrs. will make it through these tough times, and again I remember I am Blessed to have a job that employees me 40 hours a week. As a long time employee I am also an Investor in Walgreens, buying and investing in Walgreens Stock for almost 19 years, and also part of the Deferred Profit Sharing Program and experiencing a large loss in the value of both areas, but I am trying to stay positive. I wondering when the VP,s and others High Level Mgmt. might take there 10% or more cut in pay to help lower operating costs. At store level were cuts in store budget are made throughout the year even on a bi-weekly basis sometimes, WE are the ones who do our best to provide excellent customer service and suggest more items for customers to purchase and do our best to have the right product in stock for ads and everyday needs for customers, yet we seem to be to place where cuts, cuts, and cuts are made. Yes there was 1000 jobs affected earlier but they were offered an excellent serverance program and or same pay for moves downward in company(maybe minus some Bonus) but they had time to think about this (rewire for there Personal adjustment), but I am not sure there is the immediate impact on operating costs with the first move and as there is by taking away or reducing over 12,000 employees wages by over $5000.00 a year. Again I say I am Blessed to be employed and be able to work 40 hours a week, but not knowing whether the adjustments I had to make this week will be enough to make just my Basic Monthly Bills. This Rewiring for Growth should be a sharing process and I do hope that even the Highest Level of Mgmt. joins others in the company in adsorbing or taking the same type of pay cut I am attempting to adjust too. This would help reducing costs and increasing profits too and of course help to increase the value of the stock which I own too. Some adjustments I have had to make include: 1. Reducing the amount I put in Deferred Profit Sharing 2. Reducing the amount I am able to put into VIP 3. Reducing my giving to the Church I attend 4. Realizing I will not be able to afford purchasing anymore Walgreens Stock 5. Reducing the amount I am able to put into an IRA. There are other options I will probably have to go to also, as I figure my Monthly House Payment of $800.00 will now take one full paycheck plus part of another to make. I wonder if this is enough of a life changing event that employees who have insurance with programs offered by Walgreens will be able to change, going to lower cost one because of the decrease in salary.
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FIND ANOTHER JOB
smart on Jun 30, 2009 05:35 PMif you are an assistant mgr and you are smart----YOU SHOULD TRY TO FIND ANOTHER JOB---YOU ARE ABOUT TO BE REPLACED BY KEYHOLDERS!!!!! no notice, no pay cut, no job