Job cuts at Woolworths fashion business ‘very small’

The number of jobs that have been cut in the Woolworths fashion and home division is very small, according to CEO Roy Bagattini.

Business Day has learnt that Woolworths embarked on a restructuring process in which jobs in the ailing clothing division were shed.

Bagattini, speaking on Thursday after Woolworths released its half-year results, said the retailer employs 45,000 people and only “a very small number” of people in the fashion, home and beauty business had lost their jobs.

The retailer did not confirm the number of cuts despite being asked for comment on Tuesday.

Woolworths clothing business has been losing market share for years to more fashionable and cheaper competitors. Bagattini, who started at the company 12 months ago, initiated a strategic review of the fashion business. After the assessment it has decided to reduce the number of private labels in store and to sell less formal wear. The Woolworths clothing division aims to cut up to 7% of store space as leases come up for renewal.

Bagattini, once executive vice-president at Levi Strauss, said the retailer was working to “repurpose and redeploy” employees in divisions where there were growth opportunities. One place it could absorb staff was in the online division as it has increased its investment in improving its e-commerce capabilities, having historically underinvested in that channel.

Job losses in the retail sector come as no surprise after it experienced its worst year on record, according to Stats SA, which said on Wednesday that sales had fallen 6.9% in 2020.

This was the only year it recorded a contraction apart from 2009, the height of the global financial crisis, when sales contracted 3.2%.

Massmart, the owner of Makro and Game, recently confirmed it might retrench up to 130 people out of just more than 19,000 employees in its wholesale division.

It is combining its Makro business with its Masscash business, which owns discount supermarkets, to stop duplicating the purchasing, marketing and administrative functions.

Massmart vice-president for corporate affairs Brian Leroni said the restructure could potentially result in 130 job losses, but Massmart’s focus “will be to minimise actual jobs lost”.

Last week Spur, the owner of brands such as RocoMamas and Panarottis, announced it had recently spent R11.3m on voluntary retrenchments at its head office. The need to reduce staff came as it earned lower franchise fees in 2021. Franchise fees are worked out as a percentage of restaurant turnover, which dropped as a result of multiple lockdowns, alcohol sales bans and curfews.

SA saw 1.4-million jobs lost in 2020, according to Stats SA, with unemployment reaching a record high in the fourth quarter.