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Retail giant The Warehouse Group is cutting wages for its highest-paid staff as it grapples with shrinking businesses during the coronavirus blockade.
The company said limitations on trade at Alert Level 3 noted by Prime Minister Jacinda Ardern on Thursday meant it needed to cut operating costs even further immediately.
Stores would not be open to fully trade until at least Alert Level 2, Chief Executive Nick Grayston said Friday.
At alert level 3, some of the 258 stores would be used to process orders online, and there would also be a click-and-collect service.
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SIMON O’CONNOR / THINGS
The Warehouse is cutting some staff salaries as it faces downsizing businesses during the coronavirus blockade.
Uncertainty about when normal business would start again meant the company was taking action now, Grayston said.
“While receiving the government grant has allowed our team to be paid for longer than they would have, the announcement that stores will remain closed means that we must now take steps to mitigate this cost that we cannot maintain until we are allowed to open our stores for trade. “
The Warehouse Group has received $ 67.7 million from the Government wage subsidy scheme to support the jobs of more than 11,000 employees, divided between its chains The Warehouse and Warehouse Stationery ($ 52m), Noel Leeming ($ 12.2M), Torpedo7 ($ 3.2m) and TheMarket.com ($ 400,000).
The company’s 11,000 employees accounted for one of its biggest costs, Grayston said.
Director and executive salaries would be cut by 20 percent through June 30. Senior executives would also miss out on annual incentive payments, which were a significant part of their “pay at risk.”
The company also proposed a 20 percent pay cut for other staff earning more than $ 100,000, and a 10 percent pay cut for staff earning between $ 60,000 and $ 100,000, he said.
Staff earning less than $ 60,000 would see their wages and salaries paid at the same level as during the first four weeks of confinement.
The company will consult with staff next week.
The changes would be reviewed when New Zealand moved to Alert Level 2, and when the wage subsidy ended on June 17. Other cost cuts were also being worked on with owners and suppliers.
“The security measures were put in place early, and after confirmation of the lockout at alert level 4 for four weeks, we confirmed that employees would receive their normal pay for the four weeks.”
“The subsequent $ 67 million government wage subsidy has supported our ability to keep those people employed.
“However, we are now in a new stage of the pandemic in which the horizon remains unclear about the buying habits of customers in the short and medium term and the ability to operate physical stores.
“We have not taken this action lightly and have avoided taking such strong measures until now, but unfortunately, we must act now, as we are determined to preserve our business so that we can continue to serve the needs of New Zealanders emerging from the pandemic,” he said. .
After initial confusion over which stores would be classified as essential and capable of operating, The Warehouse joined most retailers in being forced to close.
However, in late March he got a break, along with some hardware stores and general retailers like Miter 10 and Briscoes, and started selling a limited range of products without opening his stores.
Below level 3, companies can reopen if they can operate without face-to-face contact.
