Best Buy Health Announces Layoffs Amid Restructuring and Divestiture

Best Buy Health, the healthcare segment of the prominent electronics retailer, is set to lay off 161 workers in California, marking a significant shift in the company's healthcare strategy. This move comes on the heels of Best Buy's recent divestiture of Current Health, a home care firm it had acquired in 2021 for approximately $400 million.

Layoffs and Restructuring

The job cuts, scheduled to take effect on September 12, were disclosed in a Worker Adjustment and Retraining Notification (WARN) filed on Tuesday in California. This restructuring follows a period of financial challenges for Best Buy's healthcare segment, which has struggled to meet growth expectations.

In its first quarter, Best Buy reported $109 million in charges related to the restructuring of its health unit. Additionally, the company recorded a substantial non-cash goodwill impairment charge of $475 million in its fourth quarter ended February 1, linked to downward revisions in long-term financial projections for the health segment.

Divestiture of Current Health

In late June, Best Buy confirmed the sale of Current Health back to its co-founder, Christopher McGhee. Under Best Buy's ownership, Current Health had established partnerships with prominent health systems such as Mass General Brigham, Geisinger, and Atrium Health to support hospital-at-home programs.

However, the scalability of these in-home health initiatives fell short of expectations. Best Buy CEO Corie Barry attributed this to health systems facing their own financial challenges and uncertainty surrounding the future of the federal government's hospital-at-home waiver program.

Future of Best Buy Health

Despite these setbacks, Best Buy Health continues to operate its Lively senior support brand and emergency response devices. The company's spokesperson affirmed that these services remain part of Best Buy's healthcare portfolio.

As the healthcare industry continues to evolve, Best Buy's strategic shifts highlight the challenges faced by retailers venturing into the complex and highly regulated healthcare sector. The company's focus on its core strengths in consumer electronics and its remaining healthcare offerings may signal a more cautious approach to future healthcare investments.