Woolworths to chop 1,350 jobs and admits it owes no less than $90m extra to underpaid employees | Enterprise

Unions have slammed Woolworths as “heartless” for deciding to switch 1,350 warehouse employees with robots after staff put in additional effort to see the grocery store large by the coronavirus disaster.

The corporate on Tuesday revealed plans to chop 1,350 warehouse jobs similtaneously admitting to a blowout of no less than $90m in the price of backpay for different employees it has underpaid.

Woolworths, which has loved bumper gross sales throughout the coronavirus outbreak as Australians stockpiled necessities together with rest room paper, advised the inventory change it deliberate to shut three warehouse websites in Sydney and Melbourne and exchange them with two extra extremely automated distribution centres at Moorebank in Sydney’s south-west.

The three present websites make use of 1,350 folks however the brand new ones, which Woolworths expects to value between $700m and $780m, will make use of simply 650.

It expects to pay employees who’re made redundant about $176m.

“The announcement by Woolworths to switch our members’ jobs with robots is especially heartless given the back-breaking work our members did to assist Woolworths by covid and make them large income,” Matt Toner, the director of logistics on the union representing employees on the Sydney warehouses, the United Employees Union, mentioned.

“Huge corporations can’t preserve irresponsibly hollowing out good jobs and good wages and situations.

“Woolworths and Coles ought to pay to upskill and practice their present warehouse employees within the jobs of the long run relatively than hiring new employees. Future jobs should keep dignity in wages and situations.”

Woolworths additionally mentioned that it now anticipated to spend $390m on backpay for a distinct group of staff, who labored in its shops and have been underpaid for up to nine years.

It is a blowout of no less than $90m from the earlier estimate of between $200m and $300m in what was already believed to be Australia’s largest wage underpayment case.

The precise value might be larger once more as a result of Woolworths has not included curiosity or the price of working the remediation program in its estimate.

“We all know that capitalism is sick when corporations have to chop their comparatively low-paid employees’ wages by $5 per hour, and try to get away with stealing $390m from them to make their backside strains look higher to shareholders,” Toner mentioned.

Woolworths’ warehouse closures are a part of a transfer in the direction of automation that final 12 months noticed the group open a totally automated facility in Melbourne that handles fast-moving dry items that don’t require refrigeration.

It plans to construct the same absolutely automated warehouse at Moorebank, plus a semi-automated centre subsequent door that can deal with groceries that promote extra slowly.

The Woolworths chief government, Brad Banducci, mentioned the brand new services will maintain 30% extra inventory and streamline getting merchandise into shops.

He mentioned Woolworths was “dedicated to supporting staff members at websites that can shut”.

“Will probably be a lot of years till the closure of our present services, which can present the chance to discover significant redeployment alternatives for our staff,” he mentioned.

“We’re additionally dedicated to a long-term funding in supporting all of our groups with the abilities and coaching required for the workforce of tomorrow.”

In the meantime, the chain mentioned that meals gross sales surged eight.6%, and gross sales at its low cost chain Huge W have been up a whopping 27.eight%, within the 10 weeks to 14 June.

This got here on high of wholesome will increase within the earlier three months, however revenue has been dampened by prices because of the coronavirus lockdown together with the closure of the group’s lodges and elevated restocking of cabinets.

Woolworths mentioned it anticipated to spend as much as $275m additional on coronavirus prices for the quarter.

“Because the working surroundings continues to normalise, these larger working prices, which primarily relate to retailer hygiene, social distancing and elevated provide chain flexibility, are steadily and cautiously being wound again,” it advised the ASX.

Firm shares closed Tuesday down zero.76%, or 26c, at $36.38.