The Warehouse Group is repaying wage cuts because their sales during Covid-19 restrictions were "higher than expected".
Last week, the country's biggest retailer told staff they were its priority and it was in a position to repay salary reductions but yesterday announced it would axe more than 1000 jobs.
In an internal message, sent on June 3, chief executive Nick Grayston said "we want to give you back the reduction you took".
Since opening at alert level 2, immediate sales "have been higher than expected and we were able to open earlier", Grayston said.
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"I want to stress though that the last few good weeks of sales do not come close to making up for the losses our business has realised since lockdown under alert level 4."
At the end of April, staff earning more than $60,000 were asked to take a 10 per cent salary reduction while those earning more than $100,000 were asked to take a 20 per cent cut.
Across its brands, The Warehouse Group took $67.7 million from the wage subsidy scheme.
Grayston told staff Treasury's predictions the economy would shrink by 4.6 per cent by June and unemployment could peak at 9.8 per cent meant he didn't think the "current sales increase will last".
"For us, that translates to less money in people's pockets and it is highly likely to translate into fewer sales. We will of course be keeping a watchful watch on where we need to adapt."
Grayston said the world had changed "permanently" and "whilst we're certainly not out of the woods in the longer term, please know that our people have been our priority through this time".
Yesterday, a week after that message was sent to staff, The Warehouse Group announced it would be closing six more stores and cutting jobs at its headquarters, meaning more than 1000 people's jobs would be axed.
Staff are understood to be fuming, with one set to lose his job saying the message about repaying salary cuts was posted the day after affected stores were told they'd be closing.
He called the move "heartless".
The Warehouse Group was approached for comment but a spokeswoman said she wasn't sure what they could add because Grayson was interviewed by the Herald on Monday about the job cuts.
The company said in a statement to the NZX yesterday the effects of Covid-19 made it "even more clear" it needed to move to an Agile operating model.
"Based on our insights into changing shopping habits and the anticipated economic impacts caused by Covid-19, we are accelerating some changes that had already been planned."
This morning Prime Minister Jacinda Ardern said she was "angry" with The Warehouse Group for announcing the mass job losses.
Ardern told RNZ this morning the Warehouse had promoted itself as being "in the community and for the community".
"I'm angry. If I'm speaking frankly."
Ardern said she'd been getting hundreds of letters from small-business owners trying to keep their staff and stay afloat by running down whatever reserves they had.
"The Government of course, and taxpayers, are taking a huge hit because we are prioritising keeping as many businesses and individuals employed and up and running as we can.
"I'd like to see the same attitude applied by some of our larger organisations in New Zealand - that's how I feel."
She later told media The Warehouse Group should "speak frankly" about some of the business issues it was going through, given it indicated the reason for the layoffs was not solely down to Covid-19.