The Warehouse Group has announced plans to cut nearly 10% of its workforce, both through store closures and restructuring of its Northcote, Auckland, head office.
The company says it is changing to meet customer needs by shifting to an "Agile" operating model.
Previously the group had accepted over $67 million through the Government's wage subsidy, which it said was helping to support over 11,000 staff.
Chief executive Nick Grayston said on Monday changes being proposed at the group head office will likely see a reduction of around 100-130 roles.
Store closures would see approximately 700-950 roles or 410 fewer full time equivalent store roles.
Warehouse shares gained 2c to $2.17 in early trading on Monday.
"We will be discussing our proposed realignment of our store network and operating model with impacted team members and the unions," Grayston said.
He said last month the group opened new The Warehouse and Noel Leeming stores in Lunn Avenue in Auckland "and in the coming months we are looking at six store closures, in addition to three already confirmed, across Noel Leeming, The Warehouse and Warehouse Stationery brands".
"We will carry out a full consultation process but the proposals for change include the Noel Leeming Henderson Clearance Centre, and Tokoroa store, The Warehouse Whangaparaoa, Johnsonsville and Dunedin Central stores and Warehouse Stationery Te Awamutu store. We have confirmed that in July we will close our Birkenhead The Warehouse store and that same month we will open a Noel Leeming Northlink store in Christchurch, which will replace our Papanui and The Palms stores."
Grayston said the proposed changes considered factors including proximity to our other stores, shopping habits of those in the area, store profitability and lease arrangements.
"The group will continue to assess its store network and has flexibility in its lease renewal profile with approximately one quarter of its network coming up for renewal within the next 15 months."
Grayston said since moving to Level 2, the group has seen strong trading across its brands.
"This level of trading is seen largely as a consequence of pent up demand and is not expected to continue as the economic impacts of COVID-19 are realised. Given the continued uncertainty around trading performance the board reaffirms its position on withholding guidance on [full year 2020] earnings."
16 Comments
Just the start, I would think just about every organisation is look at general 10% reduction of staff, if they have not already. Can see the Wage subsidy benefit carrying on and on.....meanwhile we are waiting on the headlines "government initiative has created a 1000 job's for those newly unemployed"
This is just the Beginning of the End.
Fall in unemployment is still monitored / covered by wage subsidy. Full affect should have been felt by September but being election will do anything/throw money till election is over so have to watch out from October, how the u employment level shoots and gets worse from bad.
a lot of companies are going to use covid as for a cover for closing, downsizing or restructuring parts of their business that are just going through the motions and not preforming as they should
it is interesting that immigration is now telling employers that find a NZ citizen to employ as the borders will be shut for awhile and work visa holders are not allowed back in, maybe until next year
I think you may be right. Both Labour and Nats would like those students here and Greens would never say anything that might be interpretted as anti-foreign but bring a few students n and Winston will be laughing. Pity because there is minimal risk (compare Taiwan to NZ - we are the bigger risk) and the golden opportunity is to get an influx of brainy foreign students instead of the ones we have been getting (those unable to get into UK or USA). An opportunity that may not exist after the election (ref vaccines, more countries like Vietnam that already have it under control).
For the amount of infrastructure and real-estate and management and professorial labour etc tied up in the tertiary sector, I would prefer to see the tertiary sector reduce back to a size that is commensurate with excellence and aim the get the rankings of "our" universities up into the top 200 to begin with and then try and get 1 into the top 100. Currently the tertiary sector is too busy doing a "dash for cash" based on numbers and not quality. NZ Universities are ranked at or below 300 yet you wouldn't detect that from the screaming and lobbying going on. What are they selling. Bunches of bananas.
Here a review of the plans and thinking of Flight Centre, now half their size.
https://www.smh.com.au/business/companies/survival-was-on-the-line-flig…
a lot of these companies that are laying off will employ new workers in a couple of months, Air NZ already got caught short, made all its call centre redundant then when we went to level two had to start rehiring some back.
watch how when we go to level one they start rehiring some pilots and cabin attendants. They use this time to get rid of the legacy employees as they have life time benefits and replace them with the new contracts
Yeah but rehiring people on lower wages. Great excuse to get rid of long term staff who have built up their pay over time with just annual wage rises. The only "Reset" we are going to see out of this mess is a wage reset to a third world level for the average worker.
Smash the oligopolistic retail sector.....Get ALDI in ASAP. Get some competition happening. Coles Myer pulled out years ago and sold the business because they couldn't be bothered managing NZ conditions and the relatively small market. I'm constantly shocked by the weekly shop here in NZ. Ridiculous pricing. Poor service, aggressive employees, limited choice. I happened to visit a friend recently and observed the neighbours mansion. It's the local PakNSave owners house...
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