Highlights

  • The Warehouse Group has confirmed a leaner head office operating structure with expanded co-sourcing.
  • Approximately 270 head office roles will leave the business as part of the restructure.
  • Total expected savings over five years are estimated at approximately NZD 70 million.

The Warehouse Group (NZX:WHS) has confirmed a new leaner operating structure for its head office, including an expanded co-sourcing partnership with Tata Consultancy Services (TCS). The changes form part of the cost reset programme announced in November 2025 and are designed to align the Group’s cost base with the requirements of a value retail model.

Cost Reset Programme and Operating Changes

The updated operating structure represents one element of a broader programme aimed at reducing the Group’s Cost of Doing Business (CODB) to below 31% of sales. Alongside labour-related changes, the programme includes non-labour cost reduction initiatives across the business.

As part of the new model, The Warehouse Group will extend its partnership with TCS to support several corporate and administrative functions. These include elements of technology services, accounting, call centre operations, and payroll. The co-sourcing arrangement is intended to provide access to modern platforms, expanded capacity, and advanced capability, including artificial intelligence, at a scale and cost not achievable internally.

With these functions supported externally, head office teams are expected to place greater focus on areas such as in-store experience, merchandise development, and supply chain activity.

Impact on Roles and Employees

The restructure will result in approximately 270 head office roles leaving the business. A small number of areas remain subject to consultation as part of the process.

Chief Executive Officer Mark Stirton acknowledged the impact of the changes on employees, noting that support measures are in place for those affected. He stated that the decisions were made within the context of ensuring long-term sustainability for the business and its workforce of approximately 10,000 team members across New Zealand.

Financial Implications

The restructure is expected to result in redundancy costs of approximately NZD 6 million in FY26. These costs will be recognised as an unusual item and will impact Reported EBIT for the financial year.

The new co-source model is expected to significantly reduce the Group’s labour cost base. Labour cost savings of approximately NZD 3–4 million are anticipated in FY26, with annualised savings projected to increase to approximately NZD 17 million by FY31. Over the initial five-year contract term, total expected savings are estimated at approximately NZD 70 million.

These savings are in addition to the estimated NZD 40 million over five years previously announced in September 2025 in relation to the Group’s licences and managed services partnership with TCS.

Upcoming Update

The Warehouse Group has advised that a broader update on the cost reset programme will be provided as part of its FY26 Half Year Results, scheduled for release on 27 March 2026.

The confirmation of a revised operating structure marks a further step in The Warehouse Group’s cost reset programme. The changes are intended to adjust the Group’s cost base, support operational focus, and provide an update pathway toward its FY26 financial reporting.

WHS shares traded at NZD 0.74 per share on 4 February 2026.

Frequently Asked Questions

Q1: Why is The Warehouse Group changing its operating structure?
A: The changes form part of a cost reset programme aimed at aligning the cost base with a value retail model.

Q2: How many roles are affected by the restructure?
A: Approximately 270 head office roles are expected to leave the business, with some areas still under consultation.

Q3: What level of savings is expected from the new model?
A: Total expected savings are estimated at approximately NZD 70 million over the initial five-year contract term.