PICK n Pay Namibia retrenched 21 workers at the coast because their positions are "non-critical".
The grocery retail shop is an Ohlthaver & List (O&L) subsidiary.
Those affected work in the warehouse, bottle store, fruit and vegetable section and administration.
O&L corporate communications manager Roux-ché Locke said the exercise is not linked to the announcement of 3 500 retrenchments by Pick n Pay in South Africa. She said the Namibian case "is part of normal business realignment".
"The tough economic climate at the coast has taken its toll on both our Pick n Pay branches at Swakopmund and Walvis Bay, eroding sales growth, inflating expenses and rendering their current business model unsustainable.
"As a result, a business decision was taken to reduce non-critical positions at these branches, effective 1 September, necessitating the rationalisation of these operations to bring cost structures in line with turnover and current performance," she explained.
At this stage, store closures are still the last resort, she said.
Staff were given options of preferential consideration for other vacancies within the group (of which most have been successful), or severance packages, which are being negotiated.
Nafawu general secretary Jacob Penda said the union learned of the retrenchments on Wednesday, and immediately arranged for negotiations.
"They were given notifications yesterday. Now, we will negotiate to minimise the impact on our members," he said.
Some workers, who spoke anonymously, said they thought they were safe after O&L told The Namibian last week that Namibian stores would not be affected.
"I was a little surprised when I got the notice," said one worker.
"We thought we were safe. O&L did not give us the right info."
The Namibian understands that some have allegedly been demoted to ensure regular employment at the company.
"They say this is voluntary, but what does that mean?
What if we want to still work at the company?" one employee asked.