CVS slashes 232 Omnicare jobs

Omnicare this fall will lay off 232 workers, or  40 percent of its Downtown payroll. The move was announced a week after new owner CVS Health Corp. took control of the pharmacy services provider.

CVS Health officials say more job cuts could follow in the coming months, as it reviews Omnicare for overlapping functions and cost-cutting opportunities. The move comes days after its $12.9 billion takeover closed on Aug. 18. Most of the disclosed layoffs will occur Oct. 30, though some employees may be offered jobs elsewhere in CVS.

Ohio officials said any job cuts will also cut into $8.4 million worth of job creation tax incentives Omnicare was awarded in 2011 when it moved its headquarters from Covington. City officials added if the company fails to maintain a minimum number of jobs through 2021, it may have to refund some incentive money.

A total of 567 Omnicare employees work at the Atrium One building on East Fourth Street.

Several of the jobs are well-paid senior positions in support functions, including several senior directors and vice presidents, including: the vice presidents of corporate information technology, finance and pharmacy purchasing and directors of pharmaceutical controls, talent management and trade relations. Affected departments include accounting, finance, legal, purchasing and human resources.

“As part of the integration of our two businesses, we have identified some overlap of corporate functions between the two organizations. As a result, a number of Omnicare corporate employees based in Cincinnati, Ohio will be released over the next several months,” said Mike DeAngelis, a CVS Health spokesman.

Cincinnati and Ohio officials say they are reviewing incentive packages.

The Ohio Development Services Agency awarded Omnicare $6 million worth of tax credits over 10 year starting in 2012 to create new jobs in Ohio. As part of that calculus, the state counted Kentucky jobs moved to Downtown because those positions were new to Ohio, but excluded 55 of those existing jobs because they were held by Ohioans that were working in Northern Kentucky at the time.

State officials say Omnicare reports its job numbers every March and is in good standing. Ohio's latest Downtown headcount for Omnicare was 547, including 492 positions that were eligible for incentives.

Omnicare receives a tax credit equivalent to 75 percent of the individual tax withholdings for eligible company employees. State officials said the incentives are earned each year, but would decline as jobs are reduced.

Ohio officials did not provide a figure of how much incentive money Omnicare has collected.

"The company does not receive tax credits for jobs it doesn't create," said Stephanie Gostomski, a spokeswoman for the agency.

Cincinnati's $2.4 million job creation tax credit was to be paid each year from 2012 to 2018 based on new jobs created for the city.The city agreed to give the company the equivalent of half new income tax revenue from the new jobs.

Since then, the city has given Omnicare $1.7 million worth of tax credits. City officials say the company remains in compliance, but may have to repay the city if it doesn't maintain number of jobs.

Omnicare told the city it would eventually employ 630 workers Downtown when it accepted the incentives. The announced cuts would lower Downtown jobs to 335.

"Failure to retain a minimum of 90 percent of their commitment through 2021... permits the city to take action from reducing the percentage or term of the tax credits or require the company to pay back some of the tax credits received," said Oscar Bedolla, director of the city's Trade and Development Department.

DeAngelis said CVS Health was reviewing Omnicare's job creation commitments to the city and state.

"CVS Health remains committed to investing and growing in both Cincinnati and Ohio," DeAngeles said. "We are aware of Omnicare’s commitment to the city of Cincinnati and the state of Ohio under the Job Creation Tax Credit agreements. We are in the process of assessing whether there will be any impact to these agreements in 2016 and beyond."

The executive assistant to Omnicare CEO Nitin Sahney holds one of the jobs being eliminated. But Sahney’s position is not listed as a casualty in paperwork received Wednesday by the Ohio Department of Job and Family Services.

Under his golden parachute clause in his contract, Sahney could receive as much $23.1 million if he loses his job in the acquisition.

Formerly a Fortune 500 company, Omnicare provides pharmacy service to nursing homes. CVS Health acquired it after shareholders agreed to take $98 per share cash from the Woonsocket, Rhode Island-based drug store chain.

Omnicare has 13,000 workers nationwide.