MAY 9, 2025 — 2ND BANKRUPTCY, MASS LAYOFFS
Rite Aid began its first round of layoffs after filing for Chapter 11 again, the second time in two years.
1,100+ corporate office workers will be laid off by Rite Aid at its Philadelphia Navy Yard headquarters and an office near its old campus in central Pennsylvania.
According to CEO Matt Schroeder, “Rite Aid’s lenders have informed us that they will not provide future funding for Rite Aid to cover payroll and employment-related expenses if we retain the entirety of our current workforce. As a result, we have no choice but to conduct employee separations at this time to enable us to continue to meet anticipated future payroll and employment-related expenses.”
Rite Aid Corporation announced that it is pursuing a strategic and value-maximizing sale process for substantially all of its assets. To facilitate this process, the Company and its subsidiaries commenced voluntary Chapter 11 proceedings in the U.S. Bankruptcy Court for the District of New Jersey.
During this process, Rite Aid customers can continue to access pharmacy services and products in stores and online, including prescriptions and immunizations. In connection with the sale process and court-supervised proceedings, the Company is working to facilitate a smooth transfer of customer prescriptions to other pharmacies. Rite Aid employees assisting with this process will continue to receive pay and benefits.
Matt Schroeder, Chief Executive Officer of Rite Aid, said, “For more than 60 years, Rite Aid has been a proud provider of pharmacy services and products to our loyal customers. While we have continued to face financial challenges, intensified by the rapidly evolving retail and healthcare landscapes in which we operate, we are encouraged by meaningful interest from a number of potential national and regional strategic acquirors. As we move forward, our key priorities are ensuring uninterrupted pharmacy services for our customers and preserving jobs for as many associates as possible.”
Mr. Schroeder continued, “I will be forever grateful to our thousands of associates for their commitment to Rite Aid and its mission, and I thank our entire team – from store associates to corporate employees – for their dedication to our customers and our company. With their support, we have played a critical role in supporting the healthcare needs of countless Americans across the communities that we are honored to serve.”
To support Rite Aid during its sale process, which it intends to conduct under section 363 of the U.S. Bankruptcy Code, the Company has secured commitments from certain of its existing lenders to access $1.94 billion in new financing. This financing, along with cash from operations, is expected to provide sufficient funding during the sale and court-supervised process. The Company intends to divest or monetize any assets that are not sold through the court-supervised process. Rite Aid has filed a number of customary motions with the Court seeking authorization to support operations, including continued payment of employee wages and benefits.
AUGUST 15, 2024 — THOUSANDS TARGETED AS ALL MICHIGAN STORES CLOSE
All of Michigan's 186 Rite Aid stores are closing, a spokesperson for the company confirmed after Rite Aid closed 12 Michigan locations.
JUNE 25, 2024 — MORE MICHIGAN STATE LAYOFFS
The company has announced the closure of its 407,000-square-foot Pontiac Rite Aid Distribution Center, located in Pontiac, Michigan on August 16, 2024. The closure will impact 191 employees, including 99 warehouse employees, 29 forklift operators, and support staff.
The closure of the Michigan State distribution center comes as the company plans to close all or nearly all of its pharmacy locations in Michigan and Ohio.
Rite Aid filed for Chapter 11 bankruptcy protection in October 2023 amid increased competition, low reimbursement, and ongoing legal battles over its role in the national opioid epidemic.
MARCH 14, 2019 — Original post…
Camp Hill, Pennsylvania-based Rite Aid has announced a major restructuring that “will reduce managerial layers and consolidate roles across the organization, resulting in the elimination of approximately 400 full-time positions, or more than 20% of the corporate positions located at the Company's headquarters and across the field organization.” According to the company, “As a result of the restructuring, Rite Aid expects to achieve annual cost savings of approximately $55 million, of which approximately $42 million will be realized within fiscal year 2020. These cost savings will serve to offset an expected reduction in income associated with its diminishing obligations under the Transition Services Agreement with Walgreen Co., which is related to the prior sale of stores.” Of course, this references the effects of a number of failed merger initiatives, which saw a large number of stores to the Walgreens Boots Alliance.
According to Rite Aid Board Member Bruce Bodaken, “It is imperative we take action to reduce the cost of current operations and become a more efficient and profitable company. “The board believes that now is the right time to undertake a leadership transition.” A company spokesperson added, claiming that the changes were for the purposes of “more closely aligning the structure and leadership of the company with the scale of its operations and pointed out that the executive departures “are not at all a result of any wrongdoing.”
There is little or no doubt that this once prosperous large company is in serious trouble, both operationally and in Wall Street. Once the company was “ranked No. 94 in the 2018 Fortune 500 list of the largest United States corporations by total revenue. The stock is now selling at a fractional value under $1 that demands a reverse split, stock exchange de-listing, or a white-knight acquisition. A very uncertain future.
Employees should not take their continued employment for granted given the present circumstances and the need to drastically reduce operational costs.
Change is coming. There will always be a tomorrow, no matter how much you may try to ignore it. There are no guarantees in life or promises for a bright future. We see good people being laid off through no fault of their own. Just because something bad hasn't happened yet doesn't mean it won't. It can happen to anyone, anytime, anywhere. No one is guaranteed to wake up tomorrow and still have a job by evening. Are you now wondering, Am I Next?