How Woolworths Will Cut IT Costs: Dumping Mainframes And Culling Staff

When companies want to reduce costs, IT is usually high on the list. And that’s proving to be the case at Woolworths, which has identified several areas of technology cost savings as part of its “Fuel For Growth” program.

Picture: monkeyc.net

The total savings for the scheme are estimated at $500 million. IT isn’t carrying all of that burden, but it is seeing cuts in three significant area:

Decommissioning of its mainframe, which is predicted to save $12 million.

“Application simplication”, which is predicted to save $22 million.

The big and nasty one: cutting approximately 400 support roles, which will include both IT and non-IT staff.

Woolworths doesn’t put a specific figure on how much the staff cuts would save. However, it says total savings across its Mercury 2 project and its support function simplification is $100 million. Subtracting all the other quoted costs leaves more than $50 million that will be cut through getting rid of employees. The lesson? Labour, as always, is the biggest cost.

Woolworths is expanding its tech activity in other areas. It says its eBay Click & Collect partnership now involves more than 948 partners (up 250 from its February launch) and covers more than 300,000 items.