The ranking state senator on the Insurance and Real Estate Committee Monday assailed CVS Health for its lack of transparency related to its decision to lay off nearly 3,000 workers as it contemplates a breakup of its company.
“The hits to the ‘Insurance Capital’ keep coming,” Sen. Tony Hwang said in a statement Monday. “In the past, I have been troubled and disappointed by CVS’ lack of transparency because the company has been reluctant and slow to disclose the number of layoffs in Connecticut. State officials must demand the transparency and clarity now.”
Hwang, a Republican who serves Bethel, Easton, Fairfield, and Newtown, pointed out that when CVS acquired Hartford-based Aetna in 2018 it promised to maintain 5,291 jobs at Aetna for at least four years.
“So, these additional layoffs are coming a mere two years after the expiration of the agreement,” Hwang said.
According to an exclusive report from Reuters Monday, CVS Health is exploring options that could include a break-up of the company to separate its retail and insurance units, as the struggling healthcare services company looks to turn around its fortunes amid pressure from investors.
CVS has been discussing various options – including how such a split would work – with its financial advisers in recent weeks, the sources said, requesting anonymity as the discussions are confidential.
The plan to potentially split the company’s pharmacy chain and the insurance business has been discussed with the board of directors, which is yet to decide on the best course of action for CVS to pursue, the sources said, cautioning that the plans have not been finalized and CVS may opt for a different strategy.
CVS is also discussing whether its pharmacy benefits manager unit, which manages drug benefits for health plans, should be housed within the retail unit or under insurance, if it were to proceed with a separation that could result in two publicly traded companies, the sources said.
Such a move would effectively unwind CVS’s landmark $70 billion takeover of healthcare insurer Aetna and come as CVS attempts to navigate one of the most challenging periods in its six-decade history.
A CVS spokesperson declined to comment on whether it is holding talks to explore options, according to Reuters.
The layoffs come less than three years after CVS Health was seeking to hire 1,600 workers in New York and 470 across Connecticut as part of a one-day national career event. At the time, said it was seeking to fill 25,000 clinical and retail positions during the fall and winter months when the incidence of flu was expected to increase and as Covid-19 vaccination and testing remained in high demand.
