CVS to lay off nearly 3,000 workers in cost-cutting drive: Here's what to know

London — CVS plans to cut about 2,900 jobs in an effort to cut costs, the company said Tuesday.

“We have embarked on a multi-year initiative to achieve $2 billion in cost savings by reducing costs and investing in technology to improve how we operate,” a spokeswoman said in a statement.

The layoffs represent less than 1% of CVS Health's ( CVS ) workforce

“The affected positions are primarily corporate roles. The reductions will not affect front-line jobs in our stores, pharmacies and distribution centers,” the spokesperson added.

The job cuts at the company, which operates a network of pharmacies across the U.S. among other businesses, add to the 5,000 or more layoffs announced last year. In 2021, CVS Health announced that it would close approximately 900 stores between 2022 and 2024.

“Our industry faces constant disruption, regulatory pressures and evolving consumer demands and expectations,” the spokesperson said Tuesday.

U.S. drugstore chains are struggling due to declining reimbursement rates for prescription drugs, according to analysts covering the industry.

At the same time, the front end of drugstores, where snacks and household staples are sold, has become less profitable as shoppers buy more of these items online from Amazon and from big-box chains like Walmart, Target and Costco. Dollar General's growth has also hit drugstore chains in rural areas.

CVS Health, which already uses artificial intelligence in some of its businesses, is investing heavily in the increasingly popular technology as well as robotics, “to further automate, reduce costs and improve the experience for all its constituents,” according to its latest annual report.

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