Australian supermarket giant Woolworths Ltd yesterday said its chief executive is to quit and 1,200 jobs face the axe after months of disappointing sales.
Grant O’Brien, who has been with the company for 28 years and has been chief executive since late 2011, recently set out a three-year plan to grow the business.
“However, the recent performance has been disappointing and below expectations,” he said in a statement. “I believe it is in the best interests of the company for a new leadership to see these plans to fruition.”
SHARES RISE
His retirement saw shares in Woolworths, which is one of the biggest supermarket chains in Australia along with rival Coles, climb 1.86 percent to A$27.34 by mid-afternoon yesterday.
O’Brien said the company was on track to exceed a forecast A$500 million (US$390 million) in cost savings, but that it would take time for the three-year strategy to produce results in sales.
Woolworths said it expected a net profit for the year of about A$2.15 billion after significant items, while ongoing strategic change would cost about A$270 million, including up to A$50 million in redundancy costs.
STRATEGY
“We now anticipate a total reduction of approximately 1,200 roles across support functions, supply chain and non-customer facing store positions,” the statement added.
Woolworths chairman Ralph Waters said the board remained committed to the three-year strategy announced last month, but said any new chief executive would not have their hands tied.
“I don’t think any CEO worth their salt would take the job with handcuffs on,” Waters was quoted as saying in the Sydney Morning Herald.
“If they have a different view from the current strategy ... they would need to convince the board to change direction,” he added.
O’Brien is to remain in the job until a replacement can be found, with a search already underway.
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