Monday, June 17, 2024

Woolworths to close 30 stores and shed 500 jobs

Woolworths Ltd has announced a restructure of the group following a review of its operating model, with the closure of 30 stores and the loss of 500 jobs across its support office and supply chain.

Additionally, 1,000 staff will move from the group office into businesses within the group, BIG W and Ezibuy will be separated with a view to selling the latter, and planned store openings will be halved and limited to 45 over the next three years. The renewal of leases at 34 underperforming stores has not yet been decided.

The restructure will cost the company $959 million, or $766 million after tax, in its FY16 results. The company’s fiscal earnings before tax and interest are expected to be between $2.55 billion and $2.57 billion.

In more positive developments, Woolworths reported its supermarkets division had achieved record ‘Voice of the Customer’ scores, improving team engagement and continued transaction growth.

“Five months ago I said we would work hard to get customers to put us first, to improve our culture and rebuild momentum,” Woolworths Ltd CEO Brad Banducci said. “Today’s announcement demonstrates both the progress we are making and our absolute commitment to act quickly to rebuild the business by doing the right thing by our customers, shareholders, team and suppliers.

“We have changed our group operating model and moved more than 1,000 team members directly into our businesses to improve accountability and help us better support our store teams and customers. We are also streamlining our shared services and, as a result, approximately 500 roles will be permanently removed from our support office and supply chain.

“We have significantly slowed our new-supermarket rollout program to focus on renewing our existing stores. We will close some underperforming and non-strategic stores and cancel or defer pipeline stores to allocate more capital to renewing our existing store network.”

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