The Warehouse says it has a $192 million gap between monthly labour costs and the $52m wage subsidy.

The Warehouse has asked some staff to take a 10 to 20 per cent pay cut or face redundancy, due to a "significant" revenue drop during the coronavirus alert level 4 lockdown, despite selling online essentials.

In an email to staff, the retail giant asked staff earning between $60,000 and $100,000 to take a 10 per cent pay cut until June 30, while staff earning above $100,000 were asked to take a 20 per cent pay cut. Those earning below $60,000 will not need to take pay cut.

Workers were told if they did not consider the temporary pay cut by Friday, they would be consulted on "other options including potential redundancy".

The Warehouse Group which owns The Warehouse, Warehouse Stationery, Noel Leeming, and Torpedo 7, has received about $52 million under the wage subsidy scheme for 8596 workers.

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There was a $192m gap between monthly labour costs and the $52m wage subsidy, The company said.

The group has been selling essential items since March 31, but the company said these only brought in a tenth of sales compared to pre-lockdown business.

"[The Warehouse Group] needs to take a number of steps to manage its cashflow so that we can preserve our business when we come out of lockdown. This includes managing the cost of our team members," staff were told in the email.

ROSS GIBLIN/STUFF The Warehouse says store closures have resulted in a significant revenue drop.

The Warehouse said as it would not be able to open its stores until at least alert level 2, it could no longer afford to pay staff their normal pay.

A company spokeswoman said about 2000 staff would have their pay cut, out of about 12,000. About 90 per cent of staff had accepted the pay cut.

She said more than 90 per cent of its sales came from stores.

Workers earning below $60,000 will receive their full pay until the end of June regardless of whether they work, she said.

First Union manufacturing division secretary Jared Abbott said the union was pleased the pay cuts were adjusted to salary bands, it had hoped distribution staff would be exempt.

"The distribution team have been working throughout the lockdown and risked their health to get orders shipped. They shouldn't have to reduce their pay," Abbott said.

Have you been affected? Get in touch anuja.nadkarni@stuff.co.nz

Pay reductions will be reviewed on June 17, when the wage subsidy ended, The Warehouse said.

Staff have been told those who accept the 20 per cent pay cut could top up their pay with eight days of annual leave to cover them for two months.

While those taking the 10 per cent pay cut will be able to use four days of their annual leave to top up their pay until June.

This article has been updated. Warehouse workers in distribution earning more than $60,000 are not exempt