Walgreens (NASDAQ:WBA) stock is in focus after the company announced today that it would lay off roughly 10% of its corporate staff. Most of the Walgreens layoffs will affect workers at the retailer’s headquarters in Deerfield, Illinois and its huge building in Chicago.
Cumulatively, Walgreens will dismiss around 504 of its corporate employees. “None of these roles are based at our stores, distribution centers, microfulfillment centers or call centers,” reported Walgreens spokesman Marty Maloney.
Here’s what else WBA stock investors should know.
WBA Stock: Walgreens Lays Off 10% of Corporate Staff
These layoffs come as Walgreens faces many legal liabilities, including the large amount of compensation the company will have to pay as a result of its opioid sales. For example, the retailer recently agreed to pay San Francisco almost $230 million “after being held responsible by a federal judge last year for contributing to the city’s ongoing opioid crisis.”
Walgreens’ spokesman, however, maintained that there is no connection between the company’s legal issues and the layoffs.
For the first half of fiscal 2023, Walgreens reported a net loss of $3 billion, “driven by a $5.4B after-tax charge to cover opioid-related claims and litigation,” according to Seeking Alpha. In a move to free up additional funds, WBA recently disclosed that it had sold about $644 million worth of its AmerisourceBergen (NYSE:ABC) stock.
As of the end of its last reported quarter, Walgreens had total cash of $1.84 billion and cumulative debt of $38.56 billion.
Walgreens’ current ratio is 0.63, indicating that the value of its debt due in the next year is higher than that of its short-term assets. As a result, the company may have difficulty paying its debt over the next 12 months.
What Comes Next?
Looking forward, investors who are interested in taking a position in WBA stock — and those who already have one — should take a closer look at the company. Specifically, they should try to determine the extent to which this retailer will have difficulty paying its bills in the future.
On the date of publication, Larry Ramer did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
