WOOLWORTHS says 500 jobs will be cut as part of a major overhaul of its business.

The supermarket chain will shut underperforming stores and restructure its operations in a $1 billion plan to boost its bottom line.

Woolworths chief executive Brad Banducci said a further 1000 staff would be moved “directly into our businesses to improve accountability and help us better support our store teams and customers,” he said in a statement.

The statement added: “Today’s announcement demonstrates both the progress we are making and our absolute commitment to act quickly to rebuild the business by doing the right thing by our customers, shareholders, team and suppliers”.

The struggling supermarket giant will take a charge of $959 million against its profit for the full year and slash 500 jobs as it continues to restructure its operations.

The charge will result in a $766 million hit on after tax profit, with fiscal 2016 earnings before interest and tax now expected to be in the range of $2.55 billion to $2.57 billion.

The retailer, which is separating its Big W and Ezibuy business and wants to sell the latter, also said it’s slowing its store rollout and closing underperforming outlets.