But the company says plans to employ 1,600 workers for new distribution centres, at different sites, means that there will be no overall net loss of jobs.
Coles Myer informed the 440 staff at the Somersby distribution centre on the NSW Central Coast and about 580 workers at Hampton Park, in Melbourne's south-east, that the centres would close.
Although Coles has pledged to pay out all staff entitlements, severance pay and edeployment services, the National Union of Workers (NUW) says the closures are a traumatic blow to the communities.
"It's a lot of long-term workers, most of them are family people ... it's a really traumatic thing for the locals," union spokesman Mark Ptolemy said.
'Devastating'
Mark Launt, who has worked at the Somersby centre for 12 years, said the closure was devastating, "Seventy per cent of us are families with kids and mortgages ... people are devastated, you can just see the look of loss on their faces."
Coles Myer says six of the new distribution centres, announced in 2003, are under construction and that through these new centres 1,600 people will be employed.
"Overall in our supply chain transformation program we anticipate no net loss of jobs," Coles Myer spokesman Scott Whiffen said.
Mr Whiffen said the company will help the workers affected, "We have made the decision to close these centres now to minimise uncertainty for our people and allow us to get new arrangements in place before the peak retail trading period."
The centres will be shut over the next four to six weeks.