Walgreens Boots Alliance will close a significant portion of its roughly 8,600 U.S. stores as the pharmacy chain seeks to turn around its struggling business, which has been hit by inflation-weary customers paring their spending.

“The current pharmacy model is not sustainable,” CEO Tim Wentworth told investors on a Thursday earnings call.

With 75% of the company’s U.S. stores accounting for 100% of its adjusted operating income, the company plans to examine the remaining 25% of its stores for closures, which would occur over the next three years, said the executive, who took the company’s helm in 2023. Shuttering 25% of its 8,600 U.S. locations would result in about 2,150 store closures.

“Changes are imminent,” but some of the specifics are still fluid, Wentworth said of the impending shutdowns. “There’s not one exact number” of closures. 

Wentworth added that the company will definitely shutter a number of its underperforming stores, but that other locations could be shifted to profitability.

Are layoffs planned? 

The company does not anticipate large-scale layoffs in closing stores, as it believes most employees at those locations would transfer to other Walgreens outlets, Wentworth said.

“You don’t need to have the number of stores we have today,” he said, adding that Walgreens expects to retain most of the subscriptions-filling business from the still-to-be-closed locations. 

“Reducing capacity is not a bad thing, from a payer standpoint,” Wentworth said. “We can serve payers very effectively from the footprint that remains.” 

The call with analysts came after Walgreens cut its guidance and reported worse-than-anticipated third-quarter earnings that received a negative reception on Wall Street, with shares of Walgreens down $3.67, or 23%, at $11.99 each, in Thursday morning trading.