Walgreens’ new PE owners cut worker holidays ahead of Thanksgiving

Last week, Bloomberg reported that Walgreens had cut pay for its retail employees following the drugstore’s $18.8 billion buyout by private equity firm Sycamore Partners. As Walgreens’ new owners look to cut costs, hourly workers will no longer receive paid holidays, including Thanksgiving, Christmas, and New Year’s. Walgreens has 220,000 workers across the country. Combined, the company could be cutting more than a million of employees’ paid holidays.

When Sycamore Partners’ takeover was announced, the Private Equity Stakeholder Project (PESP) warned that the deal posed immediate risks for workers of the massive pharmacy and retail chain. Those concerns are now being reflected in some of the first major changes under Sycamore’s ownership, with hourly employees absorbing cuts within weeks of the buyout.

The early hit to workers has deepened fears about what could follow. Sycamore Partners installed the former CEO of Staples US Retail to lead Walgreens, an executive who, during that period, oversaw the closure of roughly one third of Staples stores. In 2019, while Staples was closing stores and cutting jobs, Sycamore Partners also added debt to the company in order to extract a $1 billion dividend for itself, a move that further strained the business and underscored the firm’s pattern of prioritizing payouts over long-term stability.

For millions of people, especially in rural, low-income, and underserved communities, losing a Walgreens location means losing access to essential medications, vaccines, and basic healthcare services. Workers are already feeling the strain, and the warning signs for local communities are hard to ignore.

Below is the statement of Jim Baker, executive director of the Private Equity Stakeholder Project:

“Cutting paid holidays for hourly workers just weeks before Thanksgiving, in the middle of a cost-of-living crisis, is downright cruel. Moreover, it’s a warning sign of what might lay ahead for workers and communities who rely on Walgreens. This is exactly the kind of worker-harming cut we feared could follow a debt-loaded private equity takeover of Walgreens.

“Sycamore has a long track record of squeezing cash out of companies while workers pay the price, from shuttered stores to mass layoffs. At Staples, Sycamore Partners extracted a $1 billion dividend payout for itself even as it was closing stores and laying off workers. Walgreens workers now have to wonder whether these cuts will end up the same way: benefiting the private equity firm instead of the people who keep the company running.

“The people who keep Walgreens’ doors open deserve better than to lose income so a multi-billion-dollar private equity firm can boost its profits. If Sycamore Partners wants Walgreens to succeed, it should invest in the workers who make that possible instead of stripping away the basic benefits they count on.”