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The Warehouse says Covid-19 outbreak has nothing to do with restructure plans

More than 900 The Warehouse staff are set to lose their jobs, with the retailer yesterday confirming plans to eliminate 782 roles in the coming months. An additional 137 jobs are on the chopping block due to store closures.

But the job cuts have nothing to do with Covid-19, Pejman Okhovat, CEO of parent company The Warehouse Group, said in a statement provided to Inside Retail. It’s an attempt to keep pace with changing consumer behaviour.

According to Okhovat, the way The Warehouse operates has remained largely unchanged for years despite significant changes in the way its consumers shop, particularly with growth in online shopping (over 23 per cent in the past three years) and customers shopping at different times of the day and weekends.

First Union, New Zealand’s second largest private sector trade union, however, remains sceptical of this reasoning.

Dennis Maga, First Union general secretary, said the company had been reviewing its business for years and the pandemic has accelerated its adoption of an “agile” way of working in the group’s head office.

“Unfortunately, The Warehouse has done the disappointing thing and used Covid-19 to justify a bunch of operational business decisions that will leave hundreds of workers without jobs and thousands more with significant reductions to their incomes,” Maga said.

Consultation process

Yesterday, team members from 92 The Warehouse stores were invited to a meeting to discuss some changes to the way the company operates its stores.

“This begins the consultation process for proposed changes we announced on June 8,” Okhovat said. 

“To effectively set ourselves up for future success and to ensure our customers get the best from us, we need to manage our store hours and rosters so that our team members and our customers benefit.”

To achieve this, Okhovat said store team members have been asked to review some proposed revised rosters.

He said that while there may be a reduction in roles, there will not be any reduction in team member pay, with all The Warehouse team members soon to receive another wage increase under the collective agreement signed last year to move team members to the living wage.

If implemented, the proposed changes would see a reduction of up to 320 full-time equivalent roles or between 500-750 team members if part-time, fixed term and casual roles are included.

These numbers do not include the three proposed store closures for The Warehouse stores at Dunedin Central, Johnsonville and Whangaparaoa.

Okhovat said the Dunedin Central store is proposed to be closed to customers, but will remain in use as an online fulfilment centre.

“As we are proposing a change of rostered hours for these team members, we have now entered into formal consultation,” Okhovat said.

According to him, throughout this phase, team members have the opportunity to submit their availability through an online app and express if they are interested in voluntary redundancy.

“With team member input, store managers will then be able to work with their regional managers and the Workforce Planning team to see if all the hours within the new rosters can be filled,” Okhovat explained. “If however through this process a store does not meet the requirements, we will need to consult further with these team members.”

Longer term shift

But, according to the First Union, one worker from The Warehouse, who wished to remain anonymous due to the company’s restrictive media policy, said they and their colleagues were questioning the rationale behind the decision.

“This isn’t about Covid. This isn’t about efficiency, or what’s good for staff, or even what’s best for the customer experience,” the employee said.

“We all knew what was going to happen when Covid hit because we could feel it already in our stores – The Warehouse has changed over the last few years, and unfortunately not for the better.”

According to the worker, stores were already understaffed before the job cuts were announced.

“I’m already doing two peoples’ jobs and lots of colleagues are near breaking point,” the workers said. “There aren’t enough of us on the floor to deal with customers and upper management are demanding more and more even when we’re up double on last year at my store.”

“The biggest thing is that most Warehouse workers I know live fortnight to fortnight, so even if you don’t lose your job, losing even a couple of hours from your roster can be huge for your family.”

Maga said the First Union delegates would continue to engage with Warehouse executives and challenge the business model as it is implemented around the country.

He said workers had welcomed the cooperation between the company and the union during the consultation process but warned further challenges lay ahead.

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