Boots drugstore chain will scale back its administrative workforce by 10 percent as part of the U.K. company’s contribution to a $1.5 billion cost-cutting program initiated by its U.S.-based management.
The British division of Walgreens Boots Alliance Inc. will eliminate 700 non-store support positions through a combination of job cuts, assignments to other departments and not replacing people who quit or retire, the pharmacy operator said in a statement Monday. About 400 of the jobs will be culled at the division’s head office in Nottingham, England.
“While we have continued to deliver a solid performance in recent years, we cannot be complacent,” Boots President Simon Roberts said in the statement. “This plan will make Boots even better for our customers and drive sustainable future growth.”
Walgreens has already frozen pay for senior executives and set about closing 200 U.S. drugstores as part of its $1.5 billion spending-reduction program. Deerfield, Illinois-based Walgreens, the biggest U.S. pharmacy chain, is under pressure from investors because of a pension-fund lawsuit claiming the retailer overstated the benefits of the $15.3 billion deal that brought it full ownership of European counterpart Alliance Boots last year.
Walgreen fell as much as 1.2 percent and was trading down 0.1 percent at $83.85 as of 11:47 a.m. in New York. The stock has gained 10 percent this year, valuing the retailer at $91.5 billion.
The U.K. job cuts, equivalent to about 1 percent of the company’s workforce in the country, won’t preclude it from investing in digital technology and revamping its customer offer, Boots said. The company declined to specify potential costs or savings from the workforce reductions.