**Title: Walmart Asks Pharmacists to Take Pay Cuts to Lower Costs**
*By Siddharth Cavale*
NEW YORK, Aug 29 (Reuters) – Walmart is implementing a cost-cutting measure by asking some of its 16,000 pharmacists across the U.S. to voluntarily reduce their working hours, according to a person familiar with the matter. The move comes as the retail giant faces pressures in its pharmacy division due to declining profits from weight-loss drugs and legal settlement costs.
The pay cuts, which have not been previously reported, specifically target pharmacists in higher wage brackets. Walmart is aiming to lower costs amidst challenges in its pharmacy business, where the price of weight-loss drugs is dragging down profits despite high demand.
In addition, Walmart has agreed to pay $3.1 billion as its share of an opioid-related legal settlement, further adding to its financial burdens this year.
Despite these challenges, Walmart’s shares were up nearly 1% in afternoon trading on Tuesday. The company’s shares have seen a remarkable 12% increase this year, outperforming the broader Dow Jones Industrial Average’s 4.26% growth over the same period, as it emerges as the preferred retailer for budget-conscious customers navigating steep inflation.
According to the source, senior Walmart field leadership requested 20 market leaders at a meeting in May to ask pharmacists to voluntarily reduce their base salary hours. This means that pharmacists could go from working for 80 hours over a two-week pay period to a reduced duration of 64 or 72 hours. The directive was presented as a nationwide initiative, with market leaders from Arkansas, Tennessee, Missouri, Alabama, Georgia, Florida, and Louisiana in attendance.
As part of the cost-cutting measures, Walmart also instructed its market leaders to hire pharmacists at lower base salaries. Davey Lavergne, Walmart’s vice president of Health and Wellness, is leading these efforts.
Walmart currently pays its pharmacists an average annual salary of over $140,000, excluding bonuses and incentives.
Confirming the reduction in offered hours, Walmart told Reuters that it has observed a decrease in drug demand during the summer and has received requests from pharmacists for a better work-life balance.
Marilee McInnis, a spokesperson for Walmart, emphasized the company’s commitment to creating an excellent work environment through work-life balance and competitive compensation. She added that Walmart is actively hiring pharmacists, as it anticipates an increase in demand for their services.
Earlier this year, Walmart already scaled back the operating hours of its pharmacies by two hours at more than 4,500 U.S. stores, citing a shortage of pharmacists and pharmacy technicians resulting from the pandemic.
Michael Hogue, CEO of the American Pharmacists Association, disputed the claim that demand for medications drops during the summer. He argued that there is no data to support this assertion and pointed to pharmacists’ increasing workloads due to the rising popularity of diabetes medications, which are also used for weight loss.
Walmart’s pharmacy sales, which primarily serve rural areas, are not broken out separately, but they constitute 11% of the company’s total U.S. revenue.
Last year, Walmart agreed to pay $3.1 billion as part of the nationwide opioid settlement. The settlement includes court-ordered compliance requirements that add to pharmacists’ workload.
Pharmacists have expressed concerns about managing the same volume of prescriptions with fewer staff and work hours. Complaints have been shared on Facebook and independent message boards frequented by Walmart employees.
*Reporting by Siddharth Cavale in New York; Editing by Jonathan Oatis and Andy Sullivan*