McKesson to lay off more than 80 Minn. employees, close Rogers facility

McKesson, a massive company that distributes pharmaceuticals and medical supplies, is laying off 83 employees and permanently closing a medical-surgical distribution center in Rogers, the company said in a letter to the state Friday.

The layoffs, expected to begin around March 3, come as profits in its medical-surgical division distributing medical supplies and services are decreasing. Companywide, McKesson’s sales surged 21% in the most recent quarter to more than $93 billion. Headquartered in Irving, Texas, McKesson is a diversified company that says it touches “virtually every aspect of health.”

McKesson Medical-Surgical said in a statement Friday that company officials “made the difficult decision” to close the distribution center as it makes changes to its organization “to drive operational efficiencies and simplify our infrastructure” after a review of its strategic and operational goals.

“We informed our affected colleagues of this decision in September and are committed to supporting them through this transition with care and respect,” the statement said. “Impacted employees will receive a severance package and other career transition assistance.”

In a letter to the Minnesota Department of Employment and Economic Development, McKesson Vice President Matt Williams said the employees are not represented by a labor organization and do not have bumping rights, which allow workers with greater seniority whose jobs are eliminated to replace workers with less seniority.

“Affected employees have been made aware of the potential for other professional opportunities within McKesson, along with transition benefits including severance,” Williams said in the letter. He did not specify the amount of severance pay.

The layoff is one of several publicly announced workforce reductions amid the holiday season in Minnesota. Cargill is cutting about 475 in-person and remote jobs at the company’s Minnetonka headquarters. Solventum, Minnesota’s newest large public company, is laying off an undisclosed number of employees, it announced last week.

McKesson’s distribution center is on a 15-acre industrial property at 12999 Wilfred Lane N. in Rogers.

McKesson’s companywide adjusted profit growth has lagged behind its ballooning revenue, rising 9% year-over-year for the most recent reported quarter, the company reported.

During a recent call with investors, Chief Executive Brian Tyler said the company has seen some weaknesses in primary care markets in the “post-COVID environment.” This affected profit in the medical-surgical segment, where adjusted operating profit dropped 4% to $243 million for the quarter, the company reported.

“In response to those recent trends, we’ve taken effective actions to drive operational efficiencies and to enhance our distribution capabilities and support of our customers,” he said. The company, Tyler said, is focused on driving sustainable growth in its core distribution businesses.