Woolworths NZ to Close Stores, Restructure Staff in Major Cost-Cutting Move

As part of the changes, staff will now ‘collaborate together on tasks’ rather than working separately in departments.

A woman walks past the entrance to the Woolworths Metro supermarket in North Strathfield in Sydney, Australia on Aug. 17, 2020. Brook Mitchell/Getty Images

Woolworths New Zealand is overhauling its supermarket operations, closing two Auckland supermarkets and restructuring in-store roles in a move the company says will boost efficiency, but which the union says will come at the expense of thousands of experienced workers.

Under the changes, departments like bakery and butchery will be disestablished, and staff will instead “collaborate together on tasks” rather than being assigned to different departments.

The supermarket says the new structure will put more people on the shop floor during peak times and open up clearer leadership pathways.

However, First Union Retail Secretary Rudd Hughes said the restructure will slash pay for many senior staff and reduce their hours as their roles are replaced with lower-paid, newly created positions.

He warned that long-serving workers may be forced to take redundancy or accept pay cuts, especially in smaller towns with few job alternatives.

One long-time Woolworths employee, whose role is being disestablished, said staff at their store were “upset and angry.”

“We have a lot of long-serving butchers and bakers across the country,” the person said anonymously due to company restrictions.

“I know that many of them will be leaving rather than taking a massive pay cut to stay in the job. We’re losing tons of experience in these positions, and I think customers will inevitably notice the difference in our products.”

The restructure follows a tough year for Woolworths, which has faced declining earnings, rising costs, and public pressure.

Last year, the Australian parent company wrote down the value of its New Zealand business by $1.6 billion, and workers secured a modest 6.8 percent pay rise after what the union described as a “difficult” bargaining process.

The supermarket giant also topped the list of most-complained-about businesses in the country last year, and is currently facing criminal charges from the Commerce Commission over alleged misleading advertising and inaccurate pricing.

Woolworths Managing Director Spencer Sonn left the company at the end of March, having overseen a multi-million dollar revamp, including a rebranding from Countdown back to Woolworths during his four-year tenure.

The company says the new staffing model will be trialled in upper North Island stores from May, before being rolled out across the rest of the country.

Meanwhile, the Finance Minister has floated the idea of bringing a third player into the market to break the duopoly between Woolworths and its only serious competitor, Pak'nSave.