US pharmacist Walgreens is cutting 628 jobs in Illinois and Texas in February after its $10 billion take-private by Sycamore Partners last year, as the new private equity owner moves to reduce costs at the struggling chain.

Reuters reported on 19 February, citing company letters to state authorities, that 469 roles will be eliminated in Illinois, where Walgreens is headquartered, and a further 159 positions will be cut in Texas following the closure of a distribution centre.

In a letter to the Illinois Department of Commerce and Economic Opportunity, a Walgreens representative said: “Walgreens is reorganizing several areas of the business to best position the Company for growth and deliver results where they matter most: in our stores and with our customers and patients.”

Bloomberg News reported that the job losses form part of a broader cost-cutting drive under Sycamore Partners, which acquired the retailer last year after a period of declining profitability. The chain has faced mounting competition in its front-of-store business from online retailers and discount chains, alongside lower reimbursement rates from insurers for prescription drugs.

According to Reuters, Walgreens was taken private for $10 billion following a series of costly missteps and pressure on margins from lower-priced rivals including Amazon and Walmart.

Bloomberg News reported that Sycamore has begun trimming costs by reducing headcount and removing paid holidays for some employees, while seeking to lift store sales by expanding product ranges to include items such as electronic cigarettes.

Sycamore, a private equity firm specialising in retail and consumer investments, has previously acquired distressed brands including Staples, Talbots and Nine West.

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