Shock proposal ‘hasn’t sunk in yet’ for workers

Staff at the The Warehouse in central Dunedin were ‘‘gutted’’ and ‘‘stunned’’ by news the company has identified their store for possible closure before September.

The Warehouse Group has begun a consultation process to close six of its stores nationwide and it could mean up to 950 jobs are lost across those stores as well as three others shutting next month. A further 130 job cuts are planned for the company’s Auckland head office.

There are 42 jobs at the Dunedin Central store in Maclaggan St made up of full-time, part-time and casual workers.

Many of the Dunedin Central staff had worked at the store for between 10 and 20 years and had worked during the full range of the Covid-19 alert levels.

‘‘We’re all family people, with mortgages or rent, bills to pay, people who depend on us. It hasn’t sunk in yet,’’ one worker said.

‘‘We work hard for the company, including during Covid. Then we get told this. It doesn’t make sense.’’

First Union organiser for Otago Sonja Mitchell said the staff wanted more information about why the company planned to close the store.

‘‘The store seems to have been doing well, including before and during Covid,’’ she said.

‘‘The company’s rationale for wanting to close it isn’t clear. There has been mention of rent costs but not yet much information.’’

On Monday The Warehouse Group said in its announcement to the NZX that Covid-19 and its impact made it clear the company needed to move to an ‘‘agile’’ operating model.

Changes in shopping habits meant the company was ‘‘accelerating some changes that had already been planned’’.

Yet, a number of questions remained top of mind for staff, Ms Mitchell said, such as what a closure would mean for their jobs and what options for redeployment might be available.

She said the way the proposal was announced to staff was abrupt and left them scrambling to answer queries from the public.

‘‘The way the closure was announced to staff and the public ... meant that people working at the store were having to field calls from customers, family and friends, and the media while they still reeling from the news themselves and working.’’

She said after working in Alert Levels 4, 3 and 2, the staff did not expect to then find their jobs were in jeopardy.

The Warehouse chief executive Pejman Okhovat said the company was now entering a formal consultation process before a final decision is made around closing any stores.

Prime Minister Jacinda Ardern said she was ‘‘angry’’ with The Warehouse Group after it announced the proposal.

The company took almost $52million from the wage subsidy scheme to cover about 8500 workers.

The wage subsidy scheme is due to end today.

Ms Ardern said The Warehouse had promoted itself as being ‘‘in the community and for the community’’.

‘‘I’m angry. If I’m speaking frankly.’’

The prime minister said she had been getting hundreds of letters from small business owners trying to keep their staff and stay afloat by running down whatever reserves they had.

‘‘The Government of course, and taxpayers, are taking a huge hit because we are prioritising keeping as many businesses and individuals employed and up and running as we can.

‘‘I’d like to see the same attitude applied by some of our larger organisations in New Zealand — that’s how I feel.’’

She was hesitant to comment on the decision for The Warehouse’s executives to only have a pay cut until the end of June.

At the end of April, The Warehouse asked staff earning more than $60,000 to take a 10% pay cut and those earning more than $100,000 to take a 20% cut due to a ‘‘significant’’ revenue drop during the lockdown. — Additional reporting The New Zealand Herald.

jacob.mcsweeny@odt.co.nz