The news: CVS Health is conducting a strategic review and is considering separating its retail and insurance arms, according to Reuters.

How we got here: The news comes amid mounting pressure from investors to both cut costs and improve the struggling company’s recent financial performance.

• Just this week, hedge fund investor Larry Robbins, founder of Glenview Capital Management, met with CVS executives to propose ways the company could improve its operations, per The Wall Street Journal. Glenview owns approximately 1% of CVS’s shares outstanding.
• The same day, CVS informed employees it’d be implementing layoffs as part of a previously announced $2 billion cost-cutting plan. The move will affect about 2,900 employees, primarily serving in corporate roles, which represents less than 1% of its workforce.
• After slashing its 2024 earnings outlook several times, CVS’s shares have plummeted 24% this year to date.

What’s driving poor performance? A series of concurrent headwinds impacting multiple different sectors of CVS’s business.