As CVS employees await word on whether their jobs will be among the nearly 3,000 the Rhode Island-based company plans to eliminate, Woonsocket Mayor Christopher Beauchamp says the city should be able to weather the layoffs, though concerns remain for the future.
CVS Health, which is headquartered in Woonsocket, said Monday that it plans to lay off 2,900 employees. The layoffs will come “primarily” from the ranks of corporate employees, according to spokesman Mike DeAngelis. And while the job cuts will affect just roughly 1% of the company’s overall workforce, CVS has not said how many Rhode Island-based employees will be affected.
CVS plans to file a Worker Adjustment and Retraining Notification (WARN) notice with the state, according to DeAngelis, which is required by federal law in certain situations if the company plans to lay off more than 50 employees.
Mayor Beauchamp said he expects “about a thousand” people based in Woonsocket to get layoff notices.
Beauchamp says he’s also worried about the eventual possibility of CVS moving its headquarters or eliminating a substantial portion of its footprint in the city. But when he asked a CVS contact if they were planning to move headquarters, the mayor was told, “‘Absolutely not. Our headquarters is in Woonsocket. It’s staying there as long as the foreseeable future,’” Beauchamp said.
The kinds of management jobs that CVS says it plans to eliminate in this round of job cuts can have outsized impact, according to Leonard Lardaro, an economics professor at the University of Rhode Island. He says higher salaries have higher buying power, which can ripple through the economy. But the possible hundreds of layoffs CVS may be planning in Rhode Island are unlikely to devastate the state or local economies.
CVS Health is also exploring breaking up parts of its business, according to Reuters, which further clouds its Rhode Island future. And Lardaro says that would be a bigger shoe to drop.
“CVS is very important to Rhode Island’s economy, not only in statistical terms as far as its contribution to employment, income, all of that,” Lardaro said, “but it’s one of the kind of pride factors that we have. Having a corporate headquarters is not a small feat, it’s a very big deal, and they’re certainly a world-known corporation, so that really reflects well on us.”
Though big flagship companies like CVS and Hasbro – which recently said it may move its headquarters from Pawtucket – get lots of press, Lardaro says Rhode Island’s economy actually runs on small businesses. And he’s worried that small business closures are edging up.
“I think the real concern on my part — not that I’m not concerned about CVS or Hasbro — it’s really small and medium-sized businesses,” Lardaro said. “Because that’s going to make up a really large part of our future. And that’s something we have to be concerned about.”
