The company's dreams of building a massive health conglomerate may be fading

It's not a good time to be in the pharmacy business. Online competition, rampant shoplifting and changing shopping habits, coupled with high costs and so-so success with new ventures, are combining to produce an epidemic of stress headaches in the executive suites.

CVS announced today that it would cut about 2,900 jobs in an effort to slash costs. That's probably just the first shoe to drop, analysts say.

"We've embarked on a multi-year initiative to deliver $2 billion in cost savings by reducing expenses and investing in technologies to enhance how we work," a spokesperson said in a statement.

While the layoffs represent less than 1% of CVS' workforce, they come as the company is reported to be looking at breaking up with its Aetna health insurance unit, which hasn't lived up to its lofty initial expectations. CVS paid $70 billion for Aetna in November 2018.

The company says no final decisions have been made and it's not known whether its CVS Caremark pharmacy benefits management unit would be paired with the retail pharmacies or the insurance side of the business.

CVS management reportedly met with Glenview Capital Management on Monday, as the hedge fund voiced its thoughts on how it could improve, according to the Wall Street Journal.

Not big enough fast enough

CVS has been struggling to build the healthcare conglomerate it was dreaming of when it acquired Aetna health insurance, its Caremark pharmacy benefits management business and instore health clinics.

The first Consumer Value Store opened its doors in Lowell, Massachusetts, in 1963. Founded by brothers Stanley and Sidney Goldstein and their partner Ralph Hoagland, it focused on health and beauty products.

It had been growing at a steady rate until last year, when it cut its earnings forecasts because of problems with its Medicare business, the private version of the Aetna subsidiary.