One Year after the Walgreens Buyout: Will Critics’ Warnings Come to Pass?

Walgreens has changed since the buyout. Things that were warned may be coming to pass.

In The Lord of the Rings, Galadriel’s mirror reveals visions of the past, the present, and things that may yet come to pass. Also, as Galadriel proposes in her opening monologue, change is sometimes felt before it is fully seen. One year after Walgreens announced plans to be taken private by private equity firm Sycamore Partners, the first glimpses of what that future may hold are starting to appear.

At the time, the Private Equity Stakeholder Project warned that the deal raised serious concerns for workers, patients, and communities that rely on Walgreens pharmacies. These concerns were based on PESP’s reporting that exposed and analyzed the trajectories of similar private equity deals in the retail and healthcare industries. Sycamore financed the acquisition with an unusually high level of debt, saddling Walgreens with roughly $13.3 billion in new obligations, about 70% of the total deal value. In leveraged buyouts, that debt is placed on the company itself, forcing it to prioritize servicing loans instead of investing in operations, workers, or long-term organizational stability.

Walgreens is not just another retail brand. The company operates thousands of pharmacies across the United States and employed more than 220,000 workers at the time the buyout closed. For many communities, particularly rural and underserved areas, Walgreens locations often serve as a primary point of access for prescriptions, vaccinations, basic healthcare services, and grocery items. 

Because of that role, the stakes of the buyout were unusually high.

PESP’s analysis of the Walgreens buyout helped shape national coverage of the deal and its potential risks. Journalists cited PESP’s research and commentary in outlets including Reuters, Healthcare Dive, Newsweek, McKnight’s Long-Term Care News, and the Chicago Tribune, while PESP Executive Director Jim Baker discussed the implications of the takeover on Fox 32 Chicago. PESP also published op-eds and commentary on the acquisition, including pieces in the Chicago Sun-Times and Common Dreams, helping ensure that the public conversation around the Walgreens deal included scrutiny of the risks associated with private equity ownership.

Why the deal raised alarms

In addition to the usual risks that entail a private equity buyout, the Walgreens acquisition drew extra scrutiny because of Sycamore Partners’ track record with their portfolio companies.

Sycamore touts that it specializes in acquiring struggling retail companies and restructuring them. But several companies owned by the firm have experienced significant distressduring its ownership. Retailers such as Belk and Nine West filed for bankruptcy while under Sycamore’s control. Staples, another Sycamore-owned retailer, closed roughly one-third of stores and oversaw tens of thousands of layoffs.

These patterns helped explain why observers, including PESP, were concerned about what Sycamore’s ownership could mean for Walgreens. When private equity firms acquire companies using leveraged buyouts, they often rely on aggressive cost-cutting, asset sales, and operational restructuring to generate returns.

The profits-first, stability-last approach embraced by many private equity firms has had serious consequences for the U.S. economy. According to PESP research, private equity firms played a role in 54% of the largest U.S. corporate bankruptcies in 2025, defined as those with more than $1 billion in liabilities at the time of filing. The pattern is even more pronounced in retail. Private equity-backed companies accounted for 71% of the largest consumer discretionary bankruptcies, a category that includes many major retail brands. Private equity firms were also involved in 44% of the largest healthcare bankruptcies, highlighting how debt-heavy buyouts can destabilize companies in sectors that provide essential services. For a company like Walgreens, which sits at the intersection of retail and healthcare, those trends are particularly relevant.

Against that backdrop, Walgreens’ debt-heavy acquisition raised the question: would the same playbook be applied to one of the country’s most important pharmacy providers?

Early warning signs

In the months since the deal closed, a number of developments have deepened critics’ concerns.

Walgreens shortly began to implement cost-cutting measures under its new ownership. The company eliminated paid holidays for hourly workers, a move that immediately reduced compensation for employees at thousands of stores nationwide.

Layoffs have followed as well. Walgreens has cut hundreds of jobs across multiple states, including Illinois and Texas, as the company restructures its operations.  Walgreens’ footprint has also begun to shrink. The company reported operating roughly 8,000 locations and employing about 211,000 workers in early 2026, down from approximately 8,500 stores and 220,000 employees at the time the buyout closed.

While these changes represent a relatively small share of Walgreens’ total workforce and store count, they mirror patterns often seen in private equity acquisitions.

Why Walgreens matters

What happens at Walgreens matters beyond the company itself.

Walgreens is one of the largest pharmacy operators in the United States and plays a central role in providing access to medications and healthcare services. Store closures or staffing reductions can have ripple effects, particularly in communities where pharmacies are already disappearing. An anecdotal report from Jacksonville, Florida reports long lines related to store closures. 

In some areas, the closure of a single pharmacy can create what researchers call a “pharmacy desert,” forcing patients to travel long distances for prescriptions or basic care.

Because of that role, decisions made under private equity ownership can have consequences that extend far beyond corporate balance sheets.

Looking ahead

The Walgreens acquisition remains one of the largest private equity healthcare-related deals in recent years, and its long-term outcome is far from certain.

Private equity firms typically aim to hold companies for only a few years before selling them or taking them public again (or in the worst cases taking them to bankruptcy). Whether Sycamore can stabilize Walgreens while managing its heavy debt load will likely shape the company’s future and determine whether the concerns raised at the time of the buyout prove justified.

More recently, Walgreens has also begun exploring new revenue opportunities, including telehealth services tied to weight-loss treatments. While it is still too early to assess how those initiatives will play out, they highlight how companies under leveraged private equity ownership may seek new sources of revenue as they navigate the financial pressures created by debt-heavy acquisitions.

One year after the buyout was announced, early developments at Walgreens are reminiscent of familiar patterns seen in other private equity takeovers. Whether those warning signs grow into deeper financial or operational challenges will become clearer in the years ahead. The dire consequences for communities that can arise when private equity takes over a key health access resource like Walgreens underline the need for PESP’s research into and exposure of private equity’s profit-first ethos.