Prime Minister Jacinda Ardern 'angry' at the Warehouse Group for proposing 1080 job cuts

Tuesday, 9 June 2020

The Warehouse Group is proposing six store closures on top of three already confirmed, which could result in 1080 job losses.

Prime Minister Jacinda Ardern says she's 'angry' at the Warehouse Group for proposing to cut up to 1080 jobs.

Ardern on Tuesday morning said the Kiwi retailer had traded on an image of being 'for the community', yet was proposing to cut jobs as other businesses worked hard to keep staff on.

The Warehouse Group has proposed shutting six stores as part of a restructure, which the Prime Minister says is unfortunate considering so many small businesses are fighting to keep their staff on.

'I'm angry, if I'm speaking frankly … because at the moment, I'm getting hundreds of letters from small business owners, who are giving up everything to try and keep their staff on,' Ardern said on Morning Report.

'The Government, of course, and taxpayers are taking a huge hit, because we are prioritising trying to keep 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.'

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The Warehouse Group, which includes Torpedo 7 and Noel Leeming stores, had taken $68 million in wage subsidy payments offered by the Government, a scheme hoped to ensure businesses retain staff through the coronavirus crisis.

'I am angry, because I do think they are a company that has promoted themselves as being in the community and for the community,' Ardern said.

'I accept they've been undergoing a bit of a restructure, but if that's the reason they're doing it that's the reason they should give.'

Ardern would not weigh in on whether the Warehouse's executive team should continue to take a 20 per cent pay cut, which they had promised to take until June.

'But it's fair to say this is an extraordinary time and there are organisations that are taking a large hit but are prioritising their people as much as they can, rather than just a singular focus on shareholder.'

National MPs have criticised her stance.

Warehouse workers say they're devastated to lose their jobs as more than a thousand positions hang in the balance.

'The reality is, sadly we are hearing of a number of companies that are laying off staff. With regard to the Warehouse, we were a wee bit disappointed with the Prime Minister's comments because, rather than getting angry, what we need is action. We need action around the creation of jobs, we need action around ensuring that those small businesses can survive,' deputy leader Nikki Kaye said.

Finance spokesman Paul Goldsmith said a growth plan was needed.

'It’s not helpful for struggling businesses large or small to have their decisions second guessed by the Prime Minister. The plan as it is at the moment is massive debt-fuelled spending and waiting for a vaccine. What can governments usefully do? I think they can usefully develop a coherent plan but criticising people at the coal face is unhelpful.”

In a statement to the New Zealand stock exchange (NZX) on Monday morning, The Warehouse Group said in the coming months it would look at six store closures, in addition to three already confirmed, across Noel Leeming, The Warehouse and Warehouse Stationery brands.

The proposals would result in about 700 to 950 job losses. It was also restructuring its head office in Northcote, Auckland, which would result in 100 to 130 job losses.

Chief executive Nick Grayston said the company was working to get 'fit and healthy' in a 'rapidly changing world', and the restructure would have happened regardless of Covid-19.

The Warehouse Group's 2019 financial statements show the company's highest paid person, usually the chief executive, earnt a salary of between $2.26 million and $2.27m.

Audio provided by RNZ.