Woolworths will slash 500 jobs and close 27 underperforming stores in a restructure that will cost the company almost $1 billion.
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It follows a $3.2 billion write-down by the retailer in February when itannounced plans to sell its Masters and Home Timber and Hardware businesses.
The company has also separated its Big W department store chain from online retailer Ezibuy, ramping up speculation it is preparing for a quick sale of both entities.
The retailer's shares were up more than 7 per cent on the news.
Woolworths has two stores in Bathurst, one in the Bathurst City Centre and the second in Stockland.
The Stockland store underwent an extensive $4 million refurbishment in 2015 which was two years in the planning.
Chief executive Brad Banducci, who started in the role in February, said the retailer had to "learn from everything we've done".
"We've faced up to reality of where we are and put our past behind us," he said.
The restructure follows a review that found "material differences" between Big W and Ezibuy, which Woolworths bought in 2013 for $305 million. It has now written down the value of that business by $302 million.
About 500 jobs would be permanently removed from Woolworths' support office and supply chain, while 1000 people would be moved "directly into our businesses to improve accountability and help us better support our store teams and customers", Mr Banducci said.
"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.
Under the restructure, the supermarket giant will close a total of 27 underperforming stores - 21 in Australia and six in New Zealand. Three hotels will also close.
The company would not comment on the locations of the stores but said they were predominantly older stores that were either "loss-making or in the bottom quartile" of sales per square metre.
One store that had already closed, in Fremantle CBD, was close to several other newer stores, Mr Banducci said.
Another 34 underperforming stores were identified, which would also potentially close at the end of their leases. The 27 supermarkets flagged for closure would do so before the end of their lease, the retailer said.
Woolworths has identified five Big W stores that would probably close in the next three years, and another 18 stores have been written down.
The company said it was "cautiously optimistic" about the future of the Big W business but would not rule out a sale.
"It would be fair to say the strategy hasn't worked," Mr Banducci told Fairfax Media in relation to the Ezibuy purchase. "A lot of these things can look good on paper."
Shop, Distributive and Allied Employees' Association national secretary Gerard Dwyer said the supermarket's decision to shut down stores would have an impact on workers and their families.
"Our focus is on keeping people in jobs, and we've had an undertaking from Woolworths that their focus will be on redeploying workers to other positions where possible," he said.
"We'll be working closely with Woolworths and our members to keep them employed because we understand that they have bills to pay and families to look after."
As part of the restructure, a new operating model will introduce long-term performance measures, including sales per square metre, and return on funds employed.
It will also slow the rollout of new stores, with 45 new stores opening over the next three years rather than the planned 90.
The group review will result in restructuring costs of $959 million ($571 million non-cash), or $766 million after tax, to be recognised in 2015-16.
The company said earnings before interest and tax from continuing operations, before significant items, would come in between $2.55 billion and $2.57 billion for the year.
