Walgreens cuts 628 jobs and closes distribution facility, alarming private equity watchdog
Walgreens, the struggling retail pharmacy chain acquired by a private equity firm last year, has filed notices with state governments, notifying them that it will be laying off hundreds of workers.
Bloomberg was the first to report the news, writing that on Feb. 12, the company alerted Texas officials to the closure of a distribution facility in Houston that supplies stock to Walgreens stores in the region.
The closure of that facility, set for June 1, means 159 people will be out of work.
Two days prior, Walgreens—a private entity operating under the umbrella of Sycamore Partners—filed a formal notice in Illinois, where its headquarters has been located for 125 years, announcing it will be cutting 469 jobs.
The layoffs will impact the pharmacy’s headquarters in Chicago specifically. Sycamore Partners is located in New York City.
Prior to the acquisition, Walgreens was a publicly traded company. Its investors approved the sale in July for $11.45 a share, totaling roughly $10 billion.
This came after years of financial turmoil. In 2024, it announced the closure of a “significant” number of its remaining 8,700 stores, as 25% were experiencing unsustainably low sales.
Sycamore Partners said it planned to restructure the business, but keep the focus on retail pharmacy store operations. Notably, the investment firm owns numerous retail chains, including Staples, Belk and Hot Topic.
It officially took control of Walgreens roughly six months ago. At that time, it employed 220,000 people and operated 8,500 stores.
By January 2026, the number of stores had dropped to 8,000, and 9,000 workers had already lost their jobs. These layoffs come after those early closures and staff cuts.
Watchdog says its concerns have been ‘confirmed’
Citing Bloomberg’s reporting, the Private Equity Stakeholder Project (PESP), a nonprofit advocacy group that monitors investment activity in various industries, released a statement decrying the impact store closures will have on rural and underserved communities, where Walgreens was a “core part of healthcare access.”
It said the first signs of trouble came on Thanksgiving, when leadership at Walgreens made the decision to cut holiday pay for hourly workers.
“When holiday pay cuts were announced, we said they could be a warning sign of things to come,” Jim Baker, executive director of PESP, said in a statement. “Now Walgreens is laying off hundreds more workers, confirming concerns that early cost-cutting measures could be followed by deeper reductions. This pattern is unfortunately familiar in private equity takeovers.”
PESP added that Sycamore installed the former CEO of Staples to lead Walgreens, who “oversaw the closure of roughly one-third of Staples’ U.S. stores and tens of thousands of layoffs after Sycamore Partners took Staples private.” It also claimed that, during that time, the private equity group saddled Staples with debt, extracting $1 billion that was paid to the investment firm in the form of a dividend.
PESP said it fears Walgreens is on a similar trajectory.
“Putting the same leadership in charge of Walgreens raised serious questions from the start,” Baker stated. “At Staples, workers and communities paid the price while Sycamore extracted over $1 billion dollars from the retailer.”
“Walgreens workers and patients are now left wondering whether Sycamore Partners is applying the same playbook again,” he added.
Chad is an award-winning writer and editor with over 15 years of experience working in media. He has a decade-long professional background in healthcare, working as a writer and in public relations.