The Irish state postal operator An Post plans to lay off more than 1,300 workers over the nextthree years in a cost-cutting plan in view of its worsening financial situation.
The cutbacks are due to a 10% decline in postal volumes this year and prior to full postalliberalisation in 2011, according to the national newspaper Irish Times.
The job cuts had been expected because of deregulation and the economic downturn but are moresevere than originally anticipated. In September last year, it was reported that An Post would cutabout 1,000 jobs from its workforce. But now, a total of 1,375 full-time employees are expected toleave under the plan agreed with the company’s four main unions.
In the first phase of the plan starting from January onwards, 250 staff working at thecompany’s headquarters in Dublin are expected to take voluntary redundancies. In addition, 450staff have received letters seeking expressions of interest in recent days.
Under the terms of the redundancy package agreed with the unions, departing workers willreceive a nine weeks’ pay per year of service, up to a maximum of three and a half years’ pay, theIrish Times further reported.
The company’s spokeswoman confirmed all redundancies would be voluntary, but cuts would bemade in all areas of An Post’s business and at all levels, including headquarters, collection,retail and processing. The severity of the economic downturn in Ireland had caused mail volumes tofall more steeply than expected, and further decreases are predicted for next year. She added,however, that not all parts of the business have been equally affected. In particular, growth inonline shopping had helped boost parcel volumes.
Meanwhile, An Post last week took a €9 million majority stakeholding in the Gift Voucher Shop(GVS), the highly successful Irish pre-paid giftcard company, to boost its operations. The dealbetween An Post and GVS involves an investment in the region of €9 million made up of equity andloan notes. Now trading across the UK, the expanding company has secured five years of exclusiveaccess to 12,000 UK post offices and 8,000 pay station outlets as part of a recent strategicalliance with Royal Mail.
Donal Connell, An Post Chief Executive, described the deal as a long-term strategicinvestment, in line with the company’s ongoing drive to broaden its revenue base and build newchannels for future product development in the retail business.
“Pre-paid financial products are a strong growth sector in the consumer retail market. AnPost and the Gift Voucher Shop have always been closely aligned, given the volume of sales throughour 1250 post offices. As a market leader with unrivalled growth, GVS has significant synergy withthe An Post brand and retail offering. We are looking to drive growth at home and abroad and tobuild the product range,” he said.
For the financial year 2008, An Post reported a record operating profit of €31.2 million anda profit after tax of €33.2 million making it the fifth consecutive profitable year for the Group.Turnover, however, was down 2.9% at €850 million, reflecting a 2% drop in mail volumes compared to2007.
For the past few years until 2008, An Post was achieving strong operating profits whiletightly controlling costs, driving up quality of service and managing significant growth in mailvolumes. During the first half of 2008, An Post still generated growth in mail volumes along with astrong retail performance, efficiencies achieved by the company’s transformation programme andstrict cost control. The economic downturn, however, caused a steep decline in mail volumes in thefirst half of 2009. As a result of change programmes and automation, the company’s staff wasreduced by 351 employees in the last year alone.
An Post is already facing competition from private sector companies in over 60% of its areasof business. But with full liberalisation of postal markets across the EU from January 2011, itwill see competition in the domestic postal sector for the first time, Irish Times concluded.
