Woolworths is moving hundreds of corporate jobs offshore as it seeks to reduce costs, simplify operations and defend its position against growing competition from global rivals, as reported by Financial review.
The changes will affect teams across finance, human resources and information technology, with most of the impacted roles expected to come from the IT division.
A Woolworths spokesperson confirmed the outsourcing plans but declined to reveal how many employees would be affected. Formal consultations with staff are set to begin on Wednesday.
The retailer's corporate office currently employs nearly 10,000 people.
"Our customers are telling us they need more help managing their budgets as growing inflationary pressures impact the cost of living," the spokesperson said.
"To continue our commitment to deliver the dependable low prices and better shopping experiences our customers expect, and to remain competitive with the rapid expansion of international players in the market, we are continuing to transform our business."
Rival pressure
The move comes as Woolworths faces mounting pressure from overseas competitors, particularly Amazon.
The e-commerce giant has steadily expanded its share of Australia's online grocery market. Price-conscious shoppers are increasingly turning to Amazon for everyday essentials, including nappies, beauty products and household goods.
Woolworths said it would be "consulting with some of our corporate office teams this week on proposals to expand our existing global capabilities and managed service partnerships".
The supermarket chain already operates support offices in Hong Kong, China, Bangladesh, India and the Philippines.
Broader trend
Woolworths joins a growing list of major employers shifting some white-collar and customer service functions offshore.
In May, National Australia Bank announced plans to hire more than 1,000 employees across its Vietnam and India operations.
Officeworks, owned by Wesfarmers, is also restructuring its workforce, cutting hundreds of local positions and relocating customer service roles to India and the Philippines.
Growth plans
Despite the offshore shift, Woolworths says it remains committed to expanding its Australian operations.
The retailer employs around 180,000 people nationwide and plans to open 24 new supermarkets over the next year. The expansion is expected to create about 2,500 additional jobs.
Over the past year, chief executive Amanda Bardwell has cut $400 million in costs and reduced the number of products sold across the business as part of efforts to improve profitability.
Inflation squeeze
Woolworths and rival Coles continue to grapple with inflationary pressures linked to ongoing disruption in global supply chains and higher fuel costs.
Farmers and transport operators are pushing supermarkets to absorb rising operating costs through higher prices. At the same time, consumers remain under pressure from elevated living expenses and mortgage repayments.
The squeeze is changing shopping habits.
More households are turning to discount retailers such as Aldi and Costco, as well as Amazon, in search of lower grocery bills.
In April, Bardwell warned that Woolworths would face increasing cost pressures during the final months of the financial year as suppliers sought price increases across categories including fresh vegetables, milk and bread.
Regulatory scrutiny
The latest developments come as Australia's major supermarket operators remain under regulatory scrutiny.
Last year, both Woolworths and Coles emerged from a federal government inquiry that failed to establish evidence of price gouging despite complaints from suppliers and consumer advocates.
However, Coles suffered a setback in May when parts of its long-running "Down Down" promotional campaign were found to be misleading.
In a case brought by the Australian Competition and Consumer Commission, the Federal Court found that 13 of 14 products examined had been promoted through misleading discount claims because they had not been sold at higher prices for the required period before being discounted.
The court concluded that shoppers were misled into believing they were receiving genuine savings when, in many cases, they were paying more.
A separate case brought by the competition regulator against Woolworths is yet to be decided.