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\nPhoto: SUPPLIED\n<\/p>\n
Warehouse restructuring head office, 270 jobs under threat
\n Chief exec says cost base not sustainable
\n Company to outsource more functions to Tata Consultancy
\n Warehouse looking to save $70 million over five years
\n Expects redundancy costs about $6m<\/p>\n
The Warehouse Group is looking to axe about 270 jobs in a restructure of its head office as it looks to cut costs and improve its finances.<\/p>\n
The discount retailer said its costs were too high and it planned to outsource more of its administrative and back office functions to Tata Consultancy Services (TCS).<\/p>\n
The group earlier indicated it would be cutting jobs<\/a>, but on Wednesday confirmed the number of roles going.<\/p>\n Chief executive officer Mark Stirton said the company needed to lower costs and increase earnings.<\/p>\n “Our cost base is not sustainable for a value retailer. As one of New Zealand’s largest retail employers we must make these tough choices for our 10,000 team members and their families across the country and return the Group to sustainable profitability.”<\/p>\n He said the company was looking to get the cost of doing business below 31 percent of its sales revenue.<\/p>\n TCS would take over several corporate and administrative functions, including parts of technology, accounting, call centres and payroll.<\/p>\n Stirton said TCS could provide the services cheaper than The Warehouse, which would now have its head office working on critical areas like its in-store experience, merchandise and supply chain.<\/p>\n “Together with the non-labour cost reduction initiatives underway across the Group, these changes will help strengthen profitability and allow us to deliver better value for our customers over the long term,” Stirton said.<\/p>\n Savings and costs<\/p>\n The restructure would cost about $6m in the current financial year, but it was planned to save about $3-4m in labour costs this year, and about $17m over the next five years.<\/p>\n The restructuring and outsourcing overall was planned to save $70m over the next five years, on top of the estimated $40m already announced last year.<\/p>\n The operator of the Red Sheds, Warehouse Stationery, and appliance and electronic chain Noel Leeming has consistently struggled with poor sales and losses<\/a> over recent years.<\/p>\n