Woolworths announces job cuts amid tough market conditions

The grocery giant is shutting down an arm of the business and laying off several dozen workers in a sign of tough market conditions impacting everyone.

The market downturn is taking its toll even on the most resilient Australian businesses as grocery giant Woolworths has revealed it will cut several dozen jobs.

Woolworths is set to scrap 51 roles, predominantly Australia-based, as it shuts down a branch of the business that is focused on exports.

Woolworths International, part of the B2B food group which is a division of Woolworths, has operated as an exporter for some of its own products as well as wholesale partners, many of which were from overseas.

However, with supply chain issues and the rising cost of living, the company has decided to close it down.

The closure will be completed by the end of June.

“While we have built a business partnering with major retailers and distributors in overseas markets, ongoing geopolitical issues, Covid-19 and supply chain disruptions materially impacted Woolworths International,” a spokesperson told news.com.au.

Some of the impacted staff members could be redeployed into other parts of Woolworths while the rest will be given redundancy packages.

Woolworths International is closing down in six months. NCA NewsWire/Sarah Marshall

Woolworths originally warned about the upcoming closures during its interim results announcement last month.

“[We] intend to reorganise our approach to international markets,” the company said at the time.

Most of its own-brand exports through Woolworths International were tomato sauce. There were also some fresh products as well as small quantities of meat.

Hong Kong, Singapore, Malaysia and the Philippines were the main overseas markets the branch worked with.

Woolworths noted that other big players in the import and export industry had also given up because of tough market conditions.

For instance, in 2021, UK grocery retailer Tesco quit the space after 10 years working away at it, citing poor performance and supply chain disruptions.

Tomato source was one of its main exports.

Then last year UK supermarket Sainsbury’s also closed down its house-run export channels.

Although this is sobering news for Woolworths, the rest of its half-year results and its full-year forecast boasted staggering profits when announced in February.

Its sales for the first half of the current financial year increased 4 per cent to $33.2 billion.

Australian food division sales increased 2.5 per cent in the six months to $24.4 billion.

At the time, Woolworths Group CEO Brad Banducci said: “Our first-half result benefited from a focus on improving our customer shopping experience, restoring our operating rhythm, the non-recurrence of material Covid costs in the prior year and strong seasonal trading.”

Originally published as Woolworths announces job cuts amid tough market conditions