Layer 1

Lloyds owner: ‘Risk of redundancy’ for some under proposed changes

The company will also standardise employee terms and conditions across its business
The company will also standardise employee terms and conditions across its business

Lloydspharmacy has announced proposed changes, including possible redundancies, to keep the business viable in “a volatile marketplace” and in the face of COVID-19.

The suggested changes will “transform both how we operate and how we are structured”, Toby Anderson, CEO of Lloydspharmacy’s parent company McKesson UK wrote in an email, seen by C+D, to the company’s employees yesterday (July 6).

Changes to the business may include reshaping “parts of our organisational structure, which regrettably means that some roles may be placed at risk of redundancy”, Mr Anderson said.

“These changes will mean that we are better prepared to meet the needs of our customers and patients for years to come,” he added.

C+D has asked Lloydspharmacy whether pharmacists and pharmacy technicians will be affected by the restructuring plans.

“Protect our long-term future”

McKesson UK – which owns Lloydspharmacy and wholesaler AAH – operates in a “volatile marketplace”, which is now even more challenging due to COVID-19, Mr Anderson said.

The company had already made some changes to improve its efficiency earlier this year, “including freezing recruitment of non-critical roles, restricting travel and pausing any pay increases”. But an increase in costs, coupled with an income reduction, has “accelerated our need to act to protect our long-term future”, Mr Anderson said.

Other proposed changes to McKesson UK include “standardising employee terms and conditions across our business”. A McKesson UK spokesperson told C+D today (July 7) that the “business has evolved through the years by acquiring other companies”, which has resulted in employment contract differences.

“We want to make things fairer and more equitable across our company, so we’ll be standardising our employee terms and conditions through a collective consultation,” the spokesperson added.

McKesson UK staff will be able to put forward questions and concerns about the suggested changes through a formal consultation process that will begin on July 20, Mr Anderson said.

He added that McKesson staff would hear from their local leadership team today, “explaining what this means for you and your area of the business”, while “regular updates on the progress of the change” are expected to follow.

The company will continue to invest in its business, by “rolling out new technology through our enterprise resource planning programme and launching a new retail dispensing system”, and by working to make McKesson UK a better place for all colleagues, Mr Anderson added.

20 Comments
Question: 
What do you make of McKesson UK's announcement?

Leon The Apothecary, Student

Incidentally, it appears Echo has seen a dramatic increase in items dispensed since March this year.

E YMHB, Community pharmacist

McKesson UK is part of McKesson Corporation, one of the largest multinational corporations in the world.

At the end of the 4th quarter of 2020  Brian Tyler, chief executive declared: “During fiscal 2020, we achieved adjusted operating profit growth in all three operating segments, generated $3.9 billion of free cash flow, and successfully completed the exit of our investment in Change Healthcare.”

 

McKesson have enough money to support pharmacy key workers who have given so much in the past months, just like the government is supporting British workers, and stop making employees an adjustment variable. During hard time, McKesson should use the cash it made during the good time

R A, Community pharmacist

"McKesson UK is part of McKesson Corporation, one of the largest multinational corporations in the world"

Have you looked at their operating margins? Its like 5% of the revenue and their net profit is something like 0.4% of their revenue. Does that look like a succesful company to you?

To spell it out to you in plain english imagine a shop makes sales of £100,000. £95,000 of the sales is actually the cost of the product. This leaves you £5,000 and after paying the running cost of the shop you are left with £400 as profit. That is quite worrying. 

 

Thomas Wilde, Community pharmacist

hiding revenue within these large corporations is sadly very easy. you just charge one of your companies service charges from another thus moving money around the same umbrella company but now its no longer profit. this gives the impression that the company isnt making profits and so pays less taxes.

R A, Community pharmacist

I disagree with you there because if you look at their cash flow statements a similar picture emerges. Yes in the income statement they could say they make peanuts but cash flow statement shows how much money goes back to the parent company which is around just 4% of the revenue in this case.

I think you are mixing up accounting moves made by companies like Facebook which shifts money to regions with more favourable tax regime to pay less tax. However this money is still accounted for in financial statements. Its true large companies are more notorious for using accounting moves to minimise tax but it still doesnt change the fact that operating margins of pharmacy are wafer thin. You only have to look at pharmacy accounts for independent pharmacies being sold to see that. The glory days of pharmacy are long gone.

C A, Community pharmacist

Operating margins in Pharmacy are 15%, it must be true, the government said so in the Judicial Review

R A, Community pharmacist

For the record I was quoting for the whole group which operates all around the world not just in UK. The OP took information out of context to claim that its a robust profitable business that is withholding money which is far from the truth. 

McKesson Corporation is a company on its limbs. All McKesson Corporation needs is another disaster on the scale of COVID-19 to send it tumbling. 

Greatly Pedantic and Highly Clueless, Senior Management

In response to a previous comment about Boots, just wondering how many of these chains are going to go down the CVA route, which gives them the chance to demand lower rents and close "poorly performing" stores where the landlords won't accept having a gun pointed to their heads.

 

 

 

 

 

P M, Community pharmacist

their all going online, they will slash store numbers, have a few flagship stores for their tv adverts and the rest will be gone. all big chains are doing it.

if your a locum or community pharmacist you really should be looking to spread your wings and make as many contacts as you can

Angela Channing, Community pharmacist

Oh PM!
They're and you're.
I'm sorry!

Leon The Apothecary, Student

You get paid £5,000 a year to retrain in another healthcare profession at University these days.

Axed Locum, Locum pharmacist

They can't cut anymore!, the stores are already run on skeleton staff.The only thing they need to cut is the "Fat Cat" salaries, and slash bouses paid to the upper management, and dividends to the shareholders.

The message is clear, time to step the pressure on management by demanding higher rates of pay, or Quit, to bring their disingenous rhetoric to an end!

Adam Hall, Community pharmacist

Whilst the idea of slashing dividends to shareholders and use the cash to increase wages is laudable, we all know that if you slash dividends, the investors will take their money away and the company collapses, throwing everyone out of work. No one said Capitalism was fair

Axed Locum, Locum pharmacist

They can't cut anymore "man-hours", they are already working on the bare minimum, and working in those enviroments is quite dangerous, and also the professional side of the service is severely compromised.You must accept that these corporates are business people, and the only thing they are interested is in stretching and extracting.. This, they are doing so with a tax payer funded model.For the past twenty years they have disingenously pleaded inadequate funding, and simultaneously bagged huge profits and expanded their estate, which is clearly illogical. As for them folding, if they do, we will see the emergence of individual ownership, and possibly a different model of "pharmacy". With an ever decreasing remuneration and low morale in the sector, there is hardly a case for remaining in it.It may be a blessing in disguise if they pack up leave the shores.It may be that we will see a new model of pharmacy emerge, whcih will be more clinically dirven rather than a volume led repackaging sweat shop!

Adios for the moment. I'm not in!!

   

 

 

Chris Locum, Locum pharmacist

There are some establishments now which run simply on good will alone.

The working environment they have to practise in is doing the equivalent of draining their blood or bone marrow.

The last few months will leave an indelible mark, mental and physical on their health.
 

Leon The Apothecary, Student

It is my opinion that redundancies were always on the table and have been for a while now. Not just for Lloyds, but for many other companies as well. I have heard rumours of Well and Boots looking at doing the same.

It is not unexpected.

Clive Hodgson, Community pharmacist

The Boots response to this situation will likely be much more dramatic.

They have a considerably higher dependence on retail sales than Lloyds (or Well) and operate many large and expensive High Street or shopping centre units. The effect of this pandemic on their business will correspondingly be far greater.

Angela Channing, Community pharmacist

You are correct, Clive. This year is the tipping point. 2020 is the year of the move to online, digital, home working, cashless society, etc. The next decade is going to be like the 80s a bumpy ride. Sadly we don't have Mrs Thatcher and Ronny to drive us through it! Possibly Rishi or Priti which won't be too bad, coupled with Biden, with his strings pulled by Hillary?!?

Chris Locum, Locum pharmacist

I agree. Where are those pharmacy town-criers of yesterday? The glorious 'future' they proclaimed is nowhere in sight.

Thomas Wilde, Community pharmacist

It is it's just not in England

Job of the week

Relief Pharmacist or store based Pharmacist
Mid Wales - Powys (Builth and Lland
Competitive Salary + Location Supplement and Benefits