Walgreens is cancelling corporate bonuses faces financial hardship
Despite mounting financial pressures, Walgreens, the nation’s largest drugstore chain, said it would cancel bonuses for corporate staff this year and slash bonuses for store and pharmacy managers.
The company is dealing with both disappointing quarterly earnings and labor issues at the same time as the cutback.
Employees at Walgreens were notified on Tuesday that their annual bonuses will not be funded. On Tuesday, Walgreens pharmacy employees staged the second of three planned walkouts. Some employees demand that the company fix harsh working conditions, which make it difficult for them to fill prescriptions safely and may endanger customers’ health.
Walgreen’s interim global chief financial officer, Manmohan Mahajan, wrote: “Despite significant efforts across our US segments.
As the majority of our annual company bonus payout is determined by financial performance, last week our Compensation and Leadership Performance Committee decided not to fund the company bonus payout.
According to the company, pharmacy managers can still receive up to 25% of their target bonus based on their performance reviews.
There have been no walkouts at any of the company’s 9,000 stores nationwide, the company said, adding that the impact has been ‘minimal’.
As well as employee concerns, Walgreens faces mounting debt, budget cuts, theft, significant leadership turnover, and understaffing, as do its competitors. Shares of Walgreens have fallen about 40% this year to about $21, circling a 25-year low.
For the first time since 2020, Walgreens confirmed on Tuesday that it will not be funding “corporate” bonuses. The company delivered adjusted earnings per share of 67 cents in fourth-quarter fiscal 2023, down 16.3% from the year before.