Three ways to run a corporate back office, and what the Coles deal shows about the real cost of each
by Ben Rajah, Co-Founder and CFO, Staff Domain
Coles is offshoring several hundred corporate roles to India, expanding an existing partnership with Accenture, and will make affected staff redundant, redeploy them, or retrain them. That puts Coles into the second of three ways to run a corporate function: keep it local, hand it to a subcontracted provider, or build a team you own. The redundancy bill and the lost oversight that come with model two do not show up in the savings figure. A third option avoids both.
Why is Coles offshoring jobs to India?
Coles confirmed on 7 August 2026 that several hundred corporate workforce roles will move to India as part of a new, multi-year program with Accenture. The company would not confirm an exact number, only that it was in the several hundreds. A spokesperson said the deal would strengthen the technology and digital capabilities Coles needs to serve customers as the retail sector gets more competitive.
Two things about that statement matter more than the number. First, this is an expansion of a relationship that already existed, not a first move into offshore delivery. Second, chief executive Leah Weckert told staff the change was necessary to prepare the business for what comes next, and did not downplay the disruption it would cause. Coles says it remains a net creator of Australian jobs through its store expansion program, and that the roughly 115,000 Australians working in-store are not affected.
Coles isn't alone: the ASX's offshoring wave
Coles is the second major Australian retailer to make this move in three months. Woolworths began consulting staff in June 2026 on offshoring hundreds of finance, HR, and IT roles, part of a broader push to strip 400 million dollars from above-store support costs. National Australia Bank announced plans in May to add more than 1,000 roles across its Vietnam and India operations. Telstra has flagged cutting up to 650 roles in favour of positions in India.
Woolworths’ own explanation echoes Coles’: the company pointed to 20 years of existing offshore teams and managed service arrangements, framing the move as an expansion, not a first step. Read together, these are not four isolated cost-cutting decisions. They are large, established employers scaling relationships they already had, in a low-growth retail and finance environment where every dollar of support-office cost is under scrutiny.
Is this just smart cost discipline?
The strongest case for what Coles did is a straightforward one: this is sound cost management, not a story. One financial outlet has described moves like this as a “classic overhead reset,” protecting operating margin in a business where price competition makes it hard to raise revenue.
That case deserves a straight answer, not a dismissal. The margin logic is real. A company the size of Coles has an internal function built to manage this kind of provider risk, and a redundancy bill that is immaterial against group revenue.
That is why it is the wrong model to copy at mid-market scale, which brings us to the actual decision in front of most business owners.
Three models, one decision
Model One: Fully Local
Every corporate role stays in Australia. Highest direct cost, and no offshoring risk to manage because nothing about the delivery structure changes. This was Coles’ baseline before the Accenture deal, and it is still the right call for roles that need to sit inside the business full time.
Model Two: Subcontracted Managed Service
This is what Coles chose. A consultancy or BPO provider takes over defined functions, using its own people and its own processes. It moves fast, because the provider already has delivery centres running. But it carries two costs a headline savings number does not show. The first is the redundancy event itself. The second is oversight: for the life of the contract, the business manages an outcome, not the people doing the work.
Model Three: A Built, Owned Offshore Team
The business hires specialists for defined roles, under an employer-of-record structure that handles local payroll, tax, and compliance without triggering a local redundancy. The people work for the business and report to the business. This is what Staff Domain’s dedicated team and build-operate-transfer models are built to do. It delivers cost relief similar to model two, without the redundancy trigger, because it adds capacity the business did not already have rather than replacing a team that already exists.
Model three has a real trade-off too. It takes longer to reach full capability than signing one contract with an established consultancy, and the client carries the management responsibility a subcontractor would otherwise absorb.
Then why didn't Coles just do model three?
Because model two is the right tool for Coles’ specific situation, not because it is the better model in general. Three reasons the gap matters.
Coles is expanding a relationship it already has. The governance, contract terms, and integration work were built out years ago. A mid-market business trying this for the first time pays that setup cost fresh, with none of the negotiating leverage a company Coles’ size has built up.
Coles is also solving a mobilisation problem, not just a cost problem. Moving several hundred roles at once favours a provider that already has the delivery centres in place to absorb that volume. Building an owned team hundreds of seats deep on the same timeline is a different and slower exercise.
And Coles can carry what model two costs. A dedicated function exists to catch execution risk, and the redundancy bill is a rounding error against group revenue. Most mid-market businesses have neither. I build fully loaded cost models for offshore hiring for a living. The redundancy line is the one operators miss most often when they benchmark themselves against a deal like this.
Which model fits your situation?
Ask three questions before choosing.
- Are you replacing an existing local team, or adding capacity you do not have?
If you are replacing, model two’s redundancy math applies in full, and you should cost it before you sign anything. If you are adding new capacity, model three gets you the same cost relief without triggering that cost at all. - Is the work commodity and short term?
If so, model two can be the right call, and there is no shame in saying so. - Do you have a function built to manage third-party risk the way Coles does?
If not, the oversight gap in model two is a real cost, not a footnote.
FAQ
Why is Coles offshoring jobs to India?
Coles is expanding an existing partnership with Accenture to move several hundred corporate roles offshore, citing the need to strengthen technology and digital capabilities in a more competitive retail sector.
What’s the difference between a subcontracted offshoring deal and a built offshore team?
A subcontracted deal, like Coles’ Accenture partnership, hands a function to a provider’s own staff and processes. A built team is hired directly by the business under an employer-of-record structure, managed day to day like any other team member.
Will other Australian companies follow Coles and Woolworths offshore?
Given NAB and Telstra have made similar moves in 2026, it is a live trend among large ASX-listed employers, driven by margin pressure in low-growth sectors.
Is offshoring bad for Australian jobs?
The evidence is mixed and depends on the model. A subcontracted swap that replaces an existing local team causes real, immediate job losses. A built team added to fill a gap the business could not fill locally does not.
How much does redundancy cost an Australian employer?
Under the National Employment Standards, statutory redundancy pay runs up to four weeks per year of service, capped at 12 weeks for 10 or more years of continuous service, on top of notice and unused leave entitlements.
This article is general information, not legal or tax advice. Get advice specific to your situation before acting.
