Alliance Boots, the private equity owned pharmacy chain is slashing 900 jobs over the next 3 years as part of restructuring. The company was bought out by Stefano Pessina and Kohlberg Kravis Roberts in 2007. The cuts made will affect back office roles in its health and beauty divisions mostly within its Nottingham site. The store based staff will not be affected.
The cuts could bring about new discussion of private equity and whether or not it is a good influence in the event of large employee numbers.
Alex Gourlay, chief executive of Alliance Boots’ health and beauty division, put concerns at rest regarding the private equity issue, saying: “It’s nothing to do with private equity. It’s all to do with what we think is the ongoing good management of our business and the brands that Boots owns.”
Alliance has reported the job cuts will result in a reduction of operating costs by 56 million pounds per year. They said it will take until 2013-2014, but the job cuts will take that long as well.
Gourlay said the job cuts were a result of new information technology systems, which required less people to track data. Additionally, several people related to the acquisition in 2007, were coming to an end. Also, Alliance had an objective of minimizing the number of management layers, so the balance of cuts are mostly management positions.
There is a possibility that some of the positions will be diverted to other parts of the company, or to new projects.
A large number of the companies’ sales are economy driven. Not so, in the case of Alliance.
Gourlay said: “We have been trading well, and we continue to trade well.”