CFO Reeza Isaacs is among executives taking an up to 30 percent paycut to support struggling staff.
While Woolworths is one of South Africa’s leading food retailers, which means they are an essential service, the company has had to close its non-food stores during the 21-day lockdown. According to a statement by the group, this, paired with a decline in foot traffic and a loss of trade, will “likely” have a substantial impact on its earnings and cashflow in the second half of its financial year ending June 2020.
In light of this, the Woolworths Holdings board, group CEO and senior executive team members have decided to forego up to 30 percent of their salaries and fees over the next three months. These savings will be used to provide additional financial support to struggling staff.
Woolworths group FD Reeza Isaacs said:
“This is an unprecedented time for all of us and it is important that, as senior executives, we lead from the front as we help steer our organisations through this crisis”.
During lockdown, Woolworths SA will continue to remunerate all its staff. Those who are part of the essential workforce will be receiving additional appreciation payment.
“The impact of the Covid-19 virus is being felt across all markets in which the group operates,” said Reeza. “We are actively pursuing operational steps and considering strategic options to best mitigate the impacts of the crisis and to ensure the appropriate robust response in this developing situation.”
Precautions
The company is working closely with its health and safety partners to ensure that all its operations comply with the hygiene and social distancing protocols. “Our first priority is the health and safety of our people, our customers and our stakeholders, including our extended value chain,” Reeza said. “In respect of our employees, we have implemented a range of initiatives from alternative working hours to more flexible practices, including work-from-home, leveraging a full suite of technology tools.”
The company is also implementing several key initiatives intended to mitigate some of the effects on its operations, these include:
- Facilitating trade and driving revenue through online channels
- Aggressively reducing costs
- Managing inventory and working capital
- Capital expenditure has been cut, with only critical projects moving forward
- Reduced apparel product intake
- Extended payment terms with suppliers
- Exploring alternative arrangements to current lease commitments
Woolworths Food
In the statement, Woolworths said its strong supplier partnerships are ensuring a consistent supply of food product during this critical time. “The period immediately prior to the lockdown saw unprecedented demand on specific products that consumers considered essential,” Reeza said. “This demand has begun to moderate as shopping patterns are re-set and as confidence in the food supply chain grows.”
