Coles cuts more than 400 jobs from Melbourne head office

UPDATE: COLES will sack more than 400 workers from its back office operations in Melbourne as it cuts costs to compete with Woolworths and Aldi.

John Durkan is the director of Merchandising at Coles, photographed at their store in Taronga in Melbourne. Coles today announced a new partnership with Murray Darling Co-op to supply their milk.

COLES will sack more than 400 workers from its back office operations in Melbourne as it cuts costs to compete with Woolworths and Aldi.

The supermarket giant will axe 378 permanent jobs and 60 contractors from its Tooronga-based Store Support Centre and has not ruled out further cuts..

The job losses were lower than the 600 that was speculated yesterday.

Australian Services Union branch secretary Ingrid Stitt said that the scale of the cuts was worrying.

“We are in the midst of a jobs crisis in Victoria, and any job losses, particularly in the order of hundreds in one of Australia’s largest companies, is of enormous concern,” she said.

“We will keep a close eye as this situation develops further and will ensure that any affected members are not only provided with all of their entitlements, but also a reasonable plan and provisions for transition.”

Coles managing director John Durkan said 160 people could be redeployed across the business.

“All departing team members will be provided with extensive support, including career transition services and, of course, their full entitlements,” Mr Durkan said in a statement today.

Mr Durkan said no jobs would be sent offshore.

He said the cuts were designed to simplify systems and processes, “allowing for a more efficient and productive organisation” to support further growth in Coles’ supermarkets and outlets.

Mr Durkan said that while jobs are going from the Melbourne support centre, Coles is opening 14 new stores across Victoria in the next three years.

“As part of Coles’ expanding financial services offer, we plan to create more than 70 positions,” Mr Durkan said.

Sacked workers will leave the business by September 19.

Corporate affairs director Alister Jordan would not rule out further cuts, saying the company’s operations were under constant review.

Mr Jordan admitted it was a “tough day” for workers.

“It will be a very difficult day for our entire organisation,” he said.

Mr Jordan said the company had considered all other options before making its decision.

“We’ve looked over the course of several months as to the structure of the organisation that we need to have going forward to enable the best value for our customers going forward and the best service,” he said.

Analysts have told The Australian the redundancies were part of Coles’ war with Woolworths and Aldi.

Scott Marshall of Shaw Stockbroking said Woolworths had shown that it was possible to manage a large network of supermarkets with relatively low overheads.

“I’m not at all surprised at the size of the cuts when you consider the ongoing price war with Woolworths and the continuing threat from Aldi,” Mr Marshall said.

“Both Coles and Woolworths need to be leaner organisations in terms of their logistics, purchasing and head office functions.”

The drive for a lower cost-base, he said, was a never-ending process.