Australian supermarket chain Woolworths is planning to axe 500 jobs and close underperforming stores across the country as part of a restructural plan.
The job cuts will be carried out in the company’s support office and supply chain, and another 1,000 employees would be shifted from the group office into businesses.
The company plans to continue to review non-customer facing roles throughout the business.
The restructuring will result in A$766m ($573m) on after-tax profit in the 2016 financial year. A total of A$571m ($427m) of the pre-tax number will be non-cash.
Woolworths chief executive officer Brad Banducci said: ““We have taken decisive action in General Merchandise to position the business for success. The synergies expected at the time Woolworths bought EziBuy were not realised and the performance of that business has been below our expectations.
"As a result, we have separated BIG W and EziBuy and will look at options to sell EziBuy. We will recognise impairments of A$309m ($231m) in EziBuy.
“The transformation of BIG W is progressing well under Sally Macdonald’s leadership and the impairments and other restructuring costs of A$151m ($112m) announced today help us set this business up for improved performance.
“We have significantly slowed our new supermarket rollout programme to focus on renewing our existing stores. We will close some underperforming and non-strategic stores and cancel or defer pipeline stores to allocate more capital to renewing our existing store network.”
As part of the restructure, the company will have to bear A$155m ($115m) in expenses.
Under the review of general merchandise such as strategy changes, store footprint, asset impairment and the write-down of EziBuy goodwill and other intangible assets, Woolworths will have to bear A$460m ($344m).
In connection with the closure of loss-making outlets and other related categories, the company will have to spend A$344m ($257m).