Massive layoffs at Rite Aid’s Philly HQ after filing for bankruptcy

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Rite Aid began its first round of layoffs after filing for Chapter 11 bankruptcy protection this week while also putting all its brick-and-mortar operations up for sale.

Hundreds of workers lost their jobs Monday, and hundreds more will lose their jobs in June.

In total, more than 1,100 corporate office workers will be laid off by Rite Aid at its Philadelphia Navy Yard headquarters and an office near its old campus in central Pennsylvania.

It was not clear how many employees at retail locations will lose their jobs as a result of the restructuring.

The company filed its Worker Adjustment and Retraining Notice Act letter Thursday.

Accountants, analysts, software engineers, managers and even corporate executives like vice presidents lost their jobs, according to the letter.

“Rite Aid’s lenders have informed us that they will not provide future funding for Rite Aid to cover payroll and employment-related expenses if we retain the entirety of our current workforce,” said CEO Matt Schroeder in a letter to regulators. “As a result, we have no choice but to conduct employee separations at this time to enable us to continue to meet anticipated future payroll and employment related expenses.”

To restructure the company, it secured $1.94 billion in new financing to tackle more than $2 billion in debt.

It’s possible that Rite Aid will sell itself rather than continue operating. Schroeder said in a statement that the company is in talks with multiple potential buyers.

Rite Aid already shuttered dozens of stores across the region during its last bankruptcy filing in October 2023. It emerged from that restructuring in September 2024.

As a result of this bankruptcy, the retail pharmacy chain is closing the remaining 33 locations across Philadelphia, as well as dozens more across the Delaware Valley and hundreds nationwide.

The stores range between 8,000 and 19,000 square feet and the majority of the locations are leased by the chain. Few are owned outright.

The sale also includes its Navy Yard collaboration center and headquarters, which spans 23,144 square feet, with a lease that was supposed to run until 2032. Rite Aid pays $32 per square foot for the Navy Yard lease, marketing data shows.

Most of the real estate leases are between $10 to $30 per square foot in Philadelphia.

If the company is sold to a buyer, the shuttered pharmacies could reopen as part of the new business.

When asked to comment on the bankruptcy, Rite Aid deferred to its press release.

For the next few months, the company expects to still offer pharmacy services to customers before the stores close and will transfer prescriptions, but it does not expect to purchase much else from vendors, according to the release.

“Since emerging from our financial restructuring process in September, Rite Aid has continued to experience a number of financial challenges. Unfortunately, these challenges have only intensified as a result of the rapidly evolving retail and healthcare landscapes in which we operate,” Schroeder said. “As we move forward, our key priorities are ensuring uninterrupted pharmacy services for our customers and preserving jobs for as many associates as possible.”

In the coming months, community leaders will grapple with how to repurpose the soon-to-be vacant retail spaces, which are often on busy intersections.

Steve Gartner, executive vice president for the global commercial real estate advisory company CBRE, previously told WHYY News that most former pharmacy locations are “not inherently bad real estate.”

But it will require dozens of otherwise passive landlords to find new tenants, Gartner said.