Staff angry and scared after Farmers, Whitcoulls cut pay

Thursday, 30 April 2020

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Farmers workers are angry and nervous about the future, after being told to take pay cuts.

James Pascoe Group, owners of Pascoes the Jewellers, Stewart Dawsons, Goldmark, Farmers, Stevens and Whitcoulls sent a letter to staff on April 8 announcing 20 per cent pay cuts and redundancies.

It was not immediately clear exactly how many redundancies would be.

But First Union representative Kirstin Miller said the redundancies announced so far were predominantly at Farmers head office in Auckland. It was believed to involve about 160 people.

In a letter sent to staff on April 8, Farmers announced pay cuts and redundancies as a result of the Covid-19 crisis.

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The letter from James Pascoe Group owners Anne and David Norman said if retail was not opened up by May, the pay cuts would increase to 30 per cent and then 40 per cent if the shutdown extended beyond May.

Pay would not go below the $585 wage subsidy, the letter said.

James Pascoe received $2.72 million in wage subsidies for 429 staff.

Once the stores were re-opened the pay rate would return to 80 per cent until close to normal levels of business has been achieved, the letter said.

Rod Duke, the head of Briscoe Group, is forgoing his entire salary until July.

The letter expressed sadness at the decision but said the current retail climate had been made worse by the battle against “the invisible enemy”.

“Hence it is felt that as our turnover will be lower than we have experienced in recent years we have no choice but to ‘right-size’ our organisation, which sadly means saying goodbye to a number of team members.”

In the months before the Covid-19 crisis, Farmers had indicated to the union that the company was not doing as well as it had in previous years, Miller said.

First Retail Group managing director Chris Wilkinson says discretionary spending had already been down before the Covid-19 crisis hit.

“But we would hope that they are not using the Covid-19 situation as opportunity to do what they were already doing.

“[Staff] are now worried about their ongoing employment at Farmers in light of this redundancy news within the company.”

Staff had been warned not to speak to the media, Miller said.

“We would hope that companies instead weather the storm as trade and profits are sure to pick up as soon as they are allowed to open their doors as normal. We understand online sales at Farmers is going very well.”

On April 17, The Warehouse Group announced a 20 per cent reduction in pay for staff earning more than $100,000 and a 10 per cent reduction for team members earning between $60,000 and $100,000.

'We intend to maintain wages and salaries for team members earning less than $60,000 as we have during the first four weeks of lockdown,' the company said.

The Warehouse Group includes The Warehouse, Warehouse Stationery, Torpedo7, Noel Leeming and TheMarket.

Briscoe Group managing director Rod Duke has given up his salary until at least July, while top-tier managers at the group have volunteered to reduce their salaries by 20 per cent.

Middle managers have volunteered to cut their salaries by 10 per cent, Duke said.

“But this is only on a voluntary basis,” he said.

Chris Wilkinson, chief executive of First Retail Group, said moves to cut jobs and pay in retail were not surprising.

“Any retail sector where there is a high degree of discretionary spending, spending that can be parked, is susceptible to cuts at the moment,” Wilkinson said.

“Over the last four years, globally retailers like Farmers and these big box stores, have been looking at their head office and the costs of these operations and right-sizing them.”

Retailers would be looking to create leaner head offices, Wilkinson.

“Farmers has been a family-focused company, and they may have been slower to move on this on the basis that they have been trying to look after their people.”

The continued uncertainty in the retail sector meant it was very hard for businesses to plan ahead but Wilkinson expected that there would be a muted response from consumers who were too scared to spend.

Farmers has been approached for comment.