Shedding jobs at the Red Shed

It doesn’t suffice for [the] CEO to try to pirouette away from reproach with balletic metaphors ...

Accepting a government wage subsidy cannot in itself be taken as a guarantee that there will be no redundancies. But this hardly means the money comes with no strings attached. For one thing, it creates a heightened expectation that the recipient company will fight to retain its staff. And if bitterly hard calls do need to be made, that company will be upfront in explaining the need.

It was staggering that, on the very day the Government announced a step down to level 1, The Warehouse, having freshly pocketed $68 million in wage subsidies, announced the prospect of extensive redundancies. In fact, 1080 of them. That very number had a whiff of toxicity to it.

This announcement has run counter to the collective agenda of the land as companies large and small muster inventiveness, and bravery, to do their best for their staff and the wider public. To have such a big employer seemingly bail on that mission invites suspicions of corporate pessimism, if not cynicism.

If, instead, this really was an act of unhappy but clear-eyed necessity, then this in turn carries the implication that the brave words of encouragement for consumers to support local businesses are little more than national selfcomforting, shortly to be found out. Little wonder that The Warehouse is facing heated insistence to justify its stance.

It certainly doesn’t suffice for chief executive Nick Grayston to try to pirouette away from reproach with balletic metaphors about being ‘‘nimble’’ and having an ‘‘agile operating model’’ achieved through a major restructure. The more naturally occurring metaphor would appear to be that he’s wearing a pair of invisible hobnail boots in a purposeful trudge towards an agenda that has less to do with wider social wellbeing than the company’s advertising makes out.

Prime Minister Jacinda Ardern, measured in her criticisms of Air NZ for making a hash of its refund practices, is far more openly angry about The Warehouse’s announcement. She’s hardly alone in wondering aloud to what extent preexisting agendas are being advanced under the shade of Covid-19.

To be fair, Grayston isn’t simply blaming the Covid-impelled downturn. The redundancies, he says, were based on insights into changing shopping habits. The anticipated economic impacts caused by Covid-19 meant The Warehouse was accelerating already-planned changes.

As for that large wage subsidy, in late April the company was openly lamenting a $192m gap between its monthly labour costs and the subsidy, which at the time was $52m.

The Warehouse has openly been in the wars of late. It insisted it was entitled to trade as an essential service during the lockdown, until stonily instructed to close its shops. It has cancelled an interim dividend payout, and in April asked staff to take pay cuts or face redundancy.

National MPs depict the PM’s anger as no substitute for the growth plan the Government still doesn’t have. The Warehouse would say it has been decisive in the meantime because it simply had to be. But was it? And for its part, the Government doesn’t want large companies, in particular, to regard this time of uncertainty as the path of least resistance to pursue ugly decisions briskly.

The question, really, becomes whether this is a time of uncertainty, or unhappy certainties we just don’t like. Either way, Ardern’s actions have signalled the larger players should expect pointed public inquiry into their justifications.