Over 50,000 jobs are at risk as the US owner of pharmacy chain Boots warns of possible store closures in the UK.
Walgreens Boots Alliance have said it will take “decisive steps” to reduce costs as part of a company-wide “significant restructuring” affecting 2,485 stores across the UK, and employing some 56,000 staff
The move comes after the chain said it had suffered its “most difficult quarter” since the firm’s formation, with UK like-for-like sales down 2.3%.
The firm said a store portfolio review was underway across the global business.
CEO Stefano Pessina says market challenges have “accelerated” in the three months to the end of February, but that it had failed to respond rapidly enough “resulting in a disappointing quarter”.
“We are going to be more aggressive in our response to these rapidly shifting trends,” he added.
Actions announced include “optimising its store footprint” and increasing its planned annual cost savings from $1bn to $1.5bn.
The cost cuts follow Boots’ announcement in February that 350 jobs were at risk in its Nottingham head office, amid plans to reduce costs by 20%.
Overall earnings for the firm’s second quarter were down 14.3% compared to the same period last year. The company said it was now expecting profit to be flat for the full year, down from its earlier guidance of 7% to 12% growth.
Usdaw – the Union of Shop, Distributive and Allied Workers – responded by calling on Walgreens Boots Alliance to enter into talks with the union after the company warns of UK store closures.
Daniel Adams – Usdaw National Officer says: “This is clearly very worrying news for the staff in all Boots stores and the Union will be doing all it can to support members during this difficult time. We would urge the company to engage with Usdaw as the trade union for Boots staff to ensure that all avenues to minimise job losses are explored during this critical time.”