Woolworths Australia - which owns EziBuy and Countdown - is planning a large restructure that will result in store closures and job losses.

Woolworths in Australia will slash 500 jobs and close dozens of underperforming stores in an almost $1 billion restructure.

The company, which also owns Countdown, has also separated its Big W department store chain from online retailer Ezibuy, allowing it to explore a possible sale of Ezibuy.

​Chief executive Brad Banducci, who started in the role in February, said a new operating model would see long-term performance measures introduced, including 'sales per square metre' and 'return on funds employed'.

There were "limited synergies" between Ezibuy and Big W, which was why the company decided to separate the two, he said.

"In particularly in cases of Ezibuy there were dis-synergies and it made best sense to separate.

READ MORE:

* Woolworths Australia makes Homebrand homeless

* Woolworth's Dave Chambers returns again to head Countdown supermarkets

* Six Countdown stores to close

Banducci said combining the two had taken Ezibuy away from its core focus and the things that they are good at, and dis-empowered the Big W team.

He said Ezibuy has had a challenging performance trajectory over the past few years.

Part of the challenges the business has experienced were driven by the changes with the exchange rate, particularly between Australia and New Zealand, and also, between the US dollar and NZ dollar, he said.

Ezibuy sources a lot of its product from the United States.

He said it early days in the process to sell the business.

"It's a terrific brand and great brand franchise, in particular in New Zealand.

"We've come to realise given the absence of synergies...we're not the natural owners of the business.

"We've got to learn from everything we've done. we've got to make sure we take those lessons into future decision making. It does make you pause and reflect."

Ezibuy started in Palmerston North in 1978 as a women's fashion and hardware retailer, and as well as its online store it has shops in Auckland, Wellington, Christchurch and Palmerston North.

JOB LOSSES

About 500 jobs will be permanently removed from Woolies' support office and supply chain in Australia, while 1000 people will be moved "directly into our businesses to improve accountability and help us better support our store teams and customers," Mr Banducci said in a statement.

"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," he said.

The group review leads to restructuring costs of A$959 million (NZ$571 million non-cash) or A$766 million (NZ$816) after tax to be recognised in 2015-16.

The company said its earnings before interest and tax from continuing operations, before significant items, would come in between A$2.55 billion (NZ$2.72) and A$2.57 billion (NZ$2.74) for the year.

The restructure will see the supermarket giant close a total of 27 underperforming stores - 21 in Australia and six in New Zealand. Three hotels will also close.

The company said the stores that would close were either "loss-making or in the bottom quartile" of sales per square metre.

The company said the stores would be closed before the end of their lease term.

The store closures exclude Big W stores.

A further 34 underperforming stores were identified at a cost of $71 million to the retailer.

Store roll-out will also be slowed, with 45 new stores opening over the next three years, rather than the planned 90.

Closing the stores will cost the retailer A$344 million (NZ$366m).

- With Sydney Morning Herald