Woolworths to Offshore Hundreds of Corporate Jobs
Supermarket giant Woolworths is offshoring hundreds of corporate jobs and will begin consultations with potentially affected staff today, according to a report from the ABC. The retailer would not confirm how many of its 10,000 corporate employees would be affected, but reports indicate that hundreds will be affected in teams including People, IT and Finance.
In a statement, a Woolworths spokesperson said the company needed to remove complexity and drive efficiency to remain competitive with the rapid expansion of international players in Australia's market and to keep delivering lower prices for customers. The spokesperson noted that the company has had teams located throughout Asia and longstanding managed service arrangements in place for many years, adding that these are regularly reviewed to access the best global capabilities and lower costs.
The spokesperson also said the company expected to open 24 new stores, creating roughly 2,500 roles in the year ahead across Australia and New Zealand. Last year, Woolworths Group chief executive Amanda Barwell indicated she was repositioning the business for long-term sustainable growth and planned to achieve savings of $400 million in "above-store support office costs".
Broader trend and expert commentary
The supermarket giant is the latest in a string of companies to announce plans to shift some operations offshore, including the National Australia Bank and Telstra, which says it will axe up to 650 roles in favour of jobs in India. Last month, Officeworks, owned by parent company Wesfarmers, announced plans to offshore hundreds of jobs to India and the Philippines.
University of Sydney international business professor Vikas Kumar commented on the trend, saying that a company's decision to move lower-skilled jobs, such as customer service centre workers, to Manila is about cost-saving and efficiency. However, he noted a recent trend to offshore more "high value" jobs, such as those helping to build AI, reflects a lack of skills in Australia. "We don't have the level of the expertise and the numbers that you need," he said. "It just makes more sense to do it in countries such as India where you have this kind of talent."
Professor Kumar also expressed concern for the workforce, stating that this is "the biggest problem, at least in the short term," and that a "vacuum" of talent in Australia started decades ago.
Market reaction
By midday, after news broke of Woolworths' plan, the company's share price climbed 1.75 per cent, according to the ABC report.