Warehouse Group expects to shed a net 130 jobs, or about 1.1 per cent of its workforce, in an effort to save up to $20 million a year after slimming down the structure of its retail model to try to strip out duplication.
The country’s biggest listed retailer has been consulting with staff at its store support office in Auckland and some regional centres over the past few weeks as part of an overhauled business structure that will bundle its stationery and “Red Sheds” into one division and its Noel Leeming and Torpedo7 groups into another.
Warehouse’s store teams haven’t been part of the process, which seeks to whittle down leadership into its two new arms and move support systems of the existing brands to be group-wide, it said.
Chief executive Nick Grayston said the company expects about a net 130 roles to go, and anticipates annual savings of $15 million to $20 million, with a one-off restructuring bill of between $10 million and $13 million.
Grayston said the new organisational structure is needed to drive sustainable profitability and reduce complexity in a rapidly changing retail market.
“Our teams have shared their views on our proposed changes and we can now confirm team structures,” he said.
“Discussions with team members are ongoing with a view to supporting those who are impacted through a redeployment process.
“Once the redeployment process concludes, with appointments made into newly formed roles, we will be able to confirm the number of people who may leave the business. At this stage, we are anticipating a net reduction of around 130 roles and we will be doing everything we can to support our team members during this time.”
Warehouse signalled it wanted to strip out “significant cost” by cutting duplication across the groups when announcing the new structure last month.
The Warehouse employs more than 12,000 people, according to its website. Its wage bill rose to $456.7 million in the year ended July 31, 2016, from $439 million a year earlier, while its performance based compensation jumped up to $23.1 million from $8 million in 2015.
Grayston said the savings from the restructure won’t show up until the 2018 financial year with savings in salaries and reductions in other areas including external provider and operational costs, and other overheads.
The shares rose 1.9 per cent to $2.68, and have gained 3 per cent over the past 12 months.
