Whoever has any info, pls let us know.
4 replies (most recent on top)
Yes layoffs don't help with the past. However they DO help show Wall Street the cost cutting maneuvers investors want to see when things aren't going well. I.E., profits are down? Well here's some cost cutting maneuvers to show we've got things under control, and we're reducing expenses to boost profits, so no reason to freak out we've got this. Except it's all just smoke and mirrors combined with quick short term solutions.
The mistakes made by Karen in the last 2 years warrants her being fired. 18 billion literally lit on fire and all the employees have to live in fear of her ineptitude.
It’s not about what 2nd quarter results were… layoffs don’t make up for the past…
It’s about guidance and beliefs about 4th quarter and beyond - notably their views of 2025 (at this point 3rd quarter expense can’t realize the opex reduction of layoffs as 60 days from now is into 4th quarter).
Everything to this point they have signaled a need to prioritize profitability over member (top line) growth… pricing higher… and opex (labor) cuts. With opex cuts comes less ability/neccesity to effectively use and deploy capex, so cuts happen there too.
The sad part is last year they saw the need to cut the expense to try to help with the 2024 budget… and then if you listened closely they missed on their expectations aka they didn’t price high enough and they didn’t cut deep enough. So they’ve already been hinting that more cuts are needed and price hikes need to happen to restore the profitability back to where they want it.
Let's wait and see what the second quarter results are. By all accounts it's not looking good at all. Hence all the rumors around layoffs and store closures. The real problem is the executive leadership team has to show Wall Street that they have everything under control. Unfortunately, human cuts/store closings/hours cuts is the only thing CVS knows how to cut. There are other ways to cut costs, but this is CVS we're talking about so corporate will take the easy way out for quick short term solutions, just to kick the can down the road because they don't want to invest in long term solutions.