Walmart is asking some of its 16,000 pharmacists across the US to voluntarily take pay cuts by reducing their working hours in a bid to lower costs, a person familiar with the matter told Reuters.

The cuts, which haven’t been previously reported and are aimed at pharmacists in higher wage brackets, highlight the new pressures at Walmart pharmacies, where shoppers are lining up to buy weight-loss drugs that drag on profits, despite their high price.

Walmart also has agreed to pay $3.1 billion as its share of an opioid-related legal settlement, which is adding to its legal costs this year.

The retailer’s shares were up nearly 1 per cent in afternoon trading on Tuesday. The company’s shares have risen 12 per cent this year, far outperforming the broader Dow Jones Industrial Average’s 4.26 per cent increase over the same period, as it becomes the retailer of choice for bargain-minded shoppers navigating steep inflation.

At a meeting in May, senior Walmart field leadership asked 20 market leaders – directors of 10 to 15 stores in a given area – to start asking pharmacists to voluntarily reduce their base salary hours, the source told Reuters.

For example, a pharmacist could go from an 80-hour, two-week pay period to one lasting 64 or 72 hours, said the source, who attended the meeting and spoke on condition of anonymity.

The market leaders who attended the meeting represented Arkansas, Tennessee, Missouri, Alabama, Georgia, Florida and Louisiana, though the move was presented as a nationwide one, the person said.

Leaders were asked to start hiring pharmacists at lower base salaries, the source said, adding that the moves were being led by Davey Lavergne, Walmart’s VP of Health and Wellness.

On average, the Bentonville, Arkansas-based retail chain pays its pharmacists more than $140,000 a year, excluding bonuses and incentives, according to Walmart.

Walmart confirmed to Reuters that it was reducing the number of hours it was offering some pharmacists, citing a dropoff in demand for drugs during the summer and requests from pharmacists for a better work-life balance.

A Walmart spokesperson, Marilee McInnis, said the company was “committed to creating a great place to work” through work-life balance and competitive pay, and was hiring pharmacists as it sees demand for their services grow.

Earlier this year, Walmart scaled back the operating hours of its pharmacies by two hours at more than 4500 US stores, amid a shortage of pharmacists and pharmacy technicians that began during the pandemic.

Michael Hogue, CEO of the American Pharmacists Association in Washington, said there was no data to support the assertion that demand for medications falls during the summer and that pharmacists need fewer hours to fill prescriptions.

Shortage of pharmacy technicians

The underlying reason that chain drug stores like Walmart are scaling back pharmacists’ hours is a shortage of pharmacy technicians, Hogue said. Technicians handle tasks such as counting pills, answering phones and stocking shelves, enabling pharmacists to focus on filling prescriptions. But technicians don’t hold pharmacy degrees and are paid less than pharmacists.

According to a study by the Pharmacy Workforce Center released in May, nearly 80 per cent of respondents working at chain pharmacies considered the shortage of technicians to be severe or very severe.

At the same time, the growing popularity of diabetes medications, which have become popular weight-loss drugs, have further increased workloads. In its latest quarter ended July 31, Walmart said drugs like Ozempic boosted health and wellness sales by percentages in the high teens but also dragged down profit margins.

The company does not break out revenues from its 5000 pharmacies, most of which are in rural areas. Pharmacy sales come under the company’s health and wellness business, which comprised 11 per cent of Walmart’s total US revenue last year.

Walmart last year agreed to pay $3.1 billion as part of the nationwide opioid settlement following allegations that it failed to regulate prescriptions of the painkillers.

The settlement includes many court-ordered compliance requirements that must be carried out by pharmacists, experts say.

Pharmacists have complained that this adds to their workload while they must fill the same volume of prescriptions with fewer people and work hours, according to posts on Facebook and independent message boards frequented by Walmart employees.

• Reporting by Siddharth Cavale in New York; Editing by Jonathan Oatis and Andy Sullivan, of Reuters.