Woolworths’ profits take gut punch after 17-day strike

The supermarket giant has copped a major blow in its first-half profit margins, highlighting the impact that the 17-day industrial action had on its supply chain distribution. However, job cuts are set to lessen the blow.

Australia’s largest supermarket giant, Woolworths, has acknowledged its half-year results were “below our expectations” pointing towards supply chain disruptions caused by industrial action as a significant roadblock.

The half-year results showed that the supermarket made $739 million in net profit in the six months to 31 December 2024 – a 20.6 per cent decrease from a year prior, with group earnings also dropping 14.2 per cent to $1.4 billion.

The industrial action that took place across various Woollies warehouses in Victoria and NSW for a total of 17 days cost the supermarket $95 million. The strikes – spurred by warehouse workers’ resentfulness towards an AI framework – made it “hard to recover” from the supply chain disruptions it caused, according to Woolworths chief executive Amanda Bardwell.

“The team has worked incredibly hard to recover from supply chain disruptions caused by industrial action in November and December,” said Bardwell.

“We came to an agreement that is fair and sustainable and enables ongoing productivity improvements critical to maintaining competitiveness. In Victoria, sales have not yet fully recovered, but availability and customer metrics are returning to pre-disruption levels with ongoing efforts to regain customers.”

According to the union that orchestrated the strikes, Woolworths implemented a “framework” system of performance management that had a demanding surveillance software that constantly monitored workers and led to disciplinary consequences for those who failed to maintain a 100 per cent pick rate in the warehouse.

The union claimed at the time that the workers wanted to be “treated as human beings, not robots”.

Moving forward, Woolworths group chair Scott Perkins said, they are focused on addressing the challenges facing the supermarket, trying to adapt to “rapidly changing customer behaviours” and move past the “significant disruptions.”

In the announcement, Bardwell mentioned a move to “simplify our above store Support Office, which is expected to lead to annualised gross cost savings of approximately $400 million by the end of calendar 2025”.

This “simplifying” that aims to mitigate some of the losses that Bardwell is referring to is a review of the office team structure.

According to a statement provided to HR Leader, a Woolworths spokesperson noted that this restructuring will involve job cuts: “These are difficult decisions, and we certainly don’t take them lightly. However, they are necessary to ensure our structure is agile, efficient and remains focused on customers.”

“We are sensitive that this will impact some of our office-based team, and our aim is to treat those that may be impacted with respect, care and empathy over the coming weeks and months.”