Woolworths to cut further 500 jobs

Woolworths is to axe 500 jobs in its back office and supply departments as part of an overhaul of its business amid tough competition in the Australian retail industry.

The restructure will see the supermarket giant close a total of 27 underperforming stores – 21 in Australia and six in New Zealand.

Functions across sourcing, online, quality, procurement, logistics and other functions, that were previously group led will be integrated into Big W. Five of the 186 Big W stores have been identified as stores that are likely to close in the next three years based on current trading performance at or before their lease expiry.

With the restructuring, the 500 jobs would be cut permanently from the support office and supply chain, while another 1,000 employees would be moved directly into Woolworths businesses to improve accountability and help improve support for store teams and customers, reports Sydney Morning Herald.

Investors cheered the announcement, with shares in the company up $1.15, or 5.1 per cent to $23.60 each, by 1029 AEST.

The restructure follows a review that found “material differences” between Big W and Ezibuy, which Woolworths bought in 2013 for $305 million.

Woolworths will look at selling EziBuy, chief executive Brad Banducci says. Three more Countdowns have been marked as underperforming, out of the 34 stores whose future remains uncertain.

The company also owns Countdown in New Zealand.

“Countdown will open three new stores and two replacement stores in FY17, which will create new employment opportunities”.

“We’re making good progress in rebuilding our business”, he said.

Mr Spooner said the third factor driving the Australian market upward was the strong improvement in the share price of Woolworths after the supermarket giant unveiled restructuring initiatives.

‘We will close some under-performing and non-strategic stores and cancel or defer pipeline stores to allocate more capital to renewing our existing store network, ‘ Mr Banducci added.

No Big W stores will be closed as part of the restructure.

The retailer said earnings before interest and tax from continuing operations were between A$2.55 billion and A$2.57 billion in the 2016 financial year.