- Walgreens staff have walked off the job over dispute surrounding working conditions
- Organizers of the protest have said that 300 of Walgreen’s 9,000 locations have been impacted, but the company themselves say the number is closer to 12
- Even so, cost cutting measures announced this week by the company have overshadowed the dispute, with the stock gaining over 7% on Thursday
We’ve been seeing headlines for weeks about strikes, pay disputes and other forms of industrial action, and this week it’s a group of pharmacists who are hitting back against their employer.
Walgreen has seen a number of key staff walk off the job, however there’s been mixed information as to just how widespread the action has been. Protest organizers have stated that the walkout has impacted around 300 of Walgreen’s 9,000 locations, however the company themselves has given a far lower figure of ‘no more than a dozen’ as the number of impacted pharmacies.
So what does this mean for Walgreens in the short term, and has it impacted the company’s stock price?
Walgreens pharmacists walkout
The crux of the issue with the Walgreens walkout isn’t specifically pay related like much of the other employment disputes happening around the country, though allocation of resources to wages and salaries is clearly a major component of the issue.
In this instance, the key issue appears to stem from working conditions and staffing levels, with employees saying they are overworked and under-staffed. They argue that it’s not just workers being impacted, but Walgreens customers too.
One organizer spoke to the Associated Press, though they wished to remain anonymous due to the risk of negative consequences from Walgreens themselves.
“It’s led to upset customers. It’s led to medication errors, vaccination errors, needle sticks.”
How the stock price reacted to the news
Very, very well. The stock was up over 7% on Thursday, and if you’re wondering how it could possibly be that news of walkouts could be so well received by the market, it’s not actually this news that has caused the stock to spike.
Yesterday, Walgreens parent company Walgreens Boots Alliance announced their forecasts into 2024, which included an aggressive string of cost cutting measures expected to save the company around $1billion.
The measures include shutting down underperforming stores and utilizing AI through their supply chain to make efficiency gains.
And when it comes to shareholder value, efficiency gains if done correctly usually translates into bigger profits. It’s this news that has boosted the share price, and overshadowed the plight of Walgreens disgruntled employees.
The bottom line
We’re in a challenging economic environment, where companies are constantly looking to reduce costs to remain profitable. At the same time, households are continuing to come under strain from cost of living pressures and ever rising interest rates.
It’s a situation where discontent is all but a given, and this can make for a bumpy road for workers, (to a lesser extent) executives and investors.
The key to getting through these times as an investor is to stick to the fundamentals. Maintain a long term view and ensure your portfolio is well diversified, and you’ll be able to ride out the volatility over time.