Walgreens is set to close five locations across Los Angeles and Orange counties in the coming weeks — a move that could result in at least 93 job losses as the struggling retailer moves ahead with a downsizing that will see around 1,200 closures nationwide.
The pharmacy chain will shutter stores in Whittier, downtown Los Angeles, Orange, Placentia and Stanton, according to a notice submitted to California’s Employment Development Department.
The store closures will lead to layoffs for a range of employees, including pharmacists, pharmacy technicians, cashiers, store managers and inventory specialists.
Last month, Walgreens’ top executive said that the company was seeing a 52% increase in “shrink” — an industry term which means loss of inventory that cannot be accounted for through sales or other legitimate means.
Tim Wentworth, CEO of parent company Walgreens Boots Alliance Inc, said that anti-theft measures such as locking up items behind glass encasing led to reduced sales.
The affected Walgreens locations in Southern California will shutter for good between March 20 and March 27 — with layoffs varying from eight to 27 employees per location.
Marty Maloney, Walgreens’ director of media relations, cited growing regulatory and reimbursement pressures as key factors contributing to the decision.
“It is never an easy decision to close a store,” Maloney told the Los Angeles Daily News.
“We know that our stores are important to the communities that we serve, and therefore do everything possible to improve the store performance.”
Malone added that the company “will work in partnership with community stakeholders to minimize customer disruptions.”
Walgreens, one of the largest pharmacy chains in the United States, has been grappling with financial difficulties in recent years — which have been exacerbated by declining foot traffic, increased labor costs and lower reimbursement rates for prescription drugs.
In the last five years, the stock price of parent company Walgreens Boots Alliance Inc. has plummeted by a whopping 82%.
In July 2015, the stock reached record highs north of $90 per share. As of Wednesday morning, it was trading at just $9.36 per share.
The COVID-19 pandemic initially boosted revenues due to demand for vaccinations and testing, but as the crisis waned, sales softened while operational costs remained high.
The company has also been weighed down by legal settlements related to opioid litigation.
Walgreens, along with other major pharmacy chains, agreed to pay billions in settlements after being accused of contributing to the opioid crisis by failing to properly monitor the distribution of prescription painkillers.
In response to these financial strains, Walgreens announced plans last year to close underperforming stores across the country.
The company has not disclosed an exact number, but industry analysts estimate that hundreds of locations could be shuttered.
In a January earnings call, Walgreens CEO Tim Wentworth indicated that store closures and operational restructuring are part of a broader strategy to streamline expenses and improve profitability.
Walgreens is not alone among pharmacy retailers that are struggling amid shifting consumer behaviors, rising operational costs and legal challenges.
Rite Aid, which filed for Chapter 11 bankruptcy in late 2023, has already announced the closure of more than 100 stores nationwide, including 31 in California.
The company has been attempting to restructure its debt while dealing with its own opioid-related lawsuits and declining sales.
CVS, Walgreens’ main competitor, is also in the midst of a strategic downsizing plan.
In 2021, the company announced that it would close 900 stores over three years as it shifts focus toward expanding its healthcare services and digital presence.
Like Walgreens, CVS has faced reduced foot traffic and rising costs, prompting it to re-evaluate the profitability of certain locations.
Beyond the pharmacy sector, traditional brick-and-mortar retailers have been struggling as well.
Major brands such as Bed Bath & Beyond, Family Dollar and Macy’s have closed stores in recent months due to declining in-store sales and increasing competition from e-commerce platforms.
The broader retail industry has seen a shift toward online shopping and same-day delivery services, making it increasingly difficult for physical stores to remain profitable.
The closures of Walgreens stores in Southern California will likely have a significant impact on local communities, particularly those that rely on these locations for essential medications and everyday household items.
In some neighborhoods, Walgreens serves as one of the few easily accessible pharmacies, especially for elderly residents and individuals with limited transportation options.
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