Myer axes jobs as retail woes grow
Myer says it is cutting 100 of its 13,000 staff as it struggles to align costs with what it describes as the toughest retail conditions in more than 25 years.
Australia’s largest department store operator said a review of all support function expenditure, including marketing, IT, HR, and merchandising, would lead to 100 employees being made redundant to align its cost structure with the "operating conditions we face".
Most of these back office roles are based at the company’s Melbourne headquarters.
"While these decisions are never easy, they are prudent and necessary to ensure our business is attuned to our operating environment," said Myer chief executive, Bernie Brookes, in a prepared statement.
Myer said investment in customer service, brand development and its omni-channel strategy were quarantined from the cuts.
The company said it was well known that the retail sector was experiencing the toughest conditions seen in over 25 years but focused its comments on rising costs rather than flagging sales.
"Costs to retail businesses are increasing significantly due to higher occupancy costs, higher wage costs, and the inflation of other outgoings including utility charges. Given these factors, it is prudent to review how we support the business to maximise the flexibility of operations for the future," the company said.
Last month, Mr Brookes described the nation's retail sector as a "tale of woe", with its growth rate to remain below 3 per cent for the next few years as consumers fret over rising energy prices, steeper healthcare and education costs and the carbon tax.
"What we are seeing in retail is really a tale of woe; we are seeing the most difficult time I have encountered in nearly 36 years that I have been involved in retail, I have not seen it as difficult, as consistently difficult, than what it is today," Mr Brookes said.
Myer has already trimmed its forecasts, warning its full-year profit would be up to 15 per cent below last year's performance, while rival David Jones has also warned of drooping sales and profitability this year.
Late last year, Myer said it would close stores this year in underperforming states such as NSW and Victoria and shrink other stores in response to the two-speed economy and online shopping.