Irish postal operator An Post has unveiled plans to downsize its workforce by about 20% over thenext four years in response to declining mail volumes.
The company, which currently employs about 10,000 people, said yesterday that it wants to reduceits staff numbers by 1,975 between 2010 and 2015 to offset the business realities resulting fromrecession, falling mail volumes and increasing competition. An Post stressed that the job losseswill be achieved through voluntary exit schemes, non-replacement of staff, on-going overtimereduction and work process improvement.
The news, a further blow to the troubled Irish economy, came as the company announced stablefinancial results for 2010 thanks to cost-cutting measures and despite stagnating revenues. Costreductions, improved efficiencies and investment in new revenue streams combined to deliver a €5.8moperating profit for An Post in 2010, compared to €5.7m the previous year. Group turnover of€805m just exceeded that of 2009 (€804m), a good result in the context of the ongoing difficultiesfacing the Irish economy. Mail income contributed €552.3m to turnover, a reduction of €13.3m(2.4%) on 2009.
An exceptional provision of €20m for Voluntary Severance/Voluntary Early Retirement costs of€20m, together with an FRS 17 pension fund charge of €3.9m (see notes) and a €6.6m cost arisingfrom the wind-down of Postbank combined to produce a Group loss after tax of €24.7m. A reduction of€26m (3.5%) in core An Post company operating costs to €740.4m was achieved mainly through reducingthe core FTE (Full-Time Equivalent) numbers by 331. This is in addition to an FTE reductionof 402 the previous year.
The ongoing effects of the recession on every Irish business, as well as increasing electronicsubstitution and competition are now well established realities impacting right across thebusiness, the company said. Traditional mail volumes declined by approximately 7% during 2010.
Company chairman, John Fitzgerald said that despite the difficult economic environment lastyear, An Post again proved its ability to adapt to changing circumstances. “Significant costsavings were achieved in relation to pay and non-pay costs. Capital expenditure of €47m wasinvested in areas critical to the company’s future success such as parcel and packet services andnew retail products, all funded from An Post’s own cash resources. An Post will continue toinvest in the foundations of future business whilst adapting to the commercial realities whichcontinue to unfold for Ireland and for the global postal sector,” he added.
For the fourth successive year, An Post delivered record domestic Quality of Service results andcontinued to meet and exceed EU targets for improvement in the handling of incoming and outgoinginternational mail.
An Post’s retail business performed very strongly once again and a further €3.1bn was investedin State Savings products during 2010. Transactions across the full range of financialand communications services increased steadily in tandem with investment in retail facilitiesincluding customer information systems, on-line terminals and general outlet improvements.Retailing and customer services training continued across An Post-run and contractor-operatedbranches and the computerisation of all small rural post offices was completed, enabling customersto avail of a broader range of services locally.
While the mail division remains by far the largest part of An Post’s business, handling over2.5m items every working day, the Group’s subsidiary companies increased their impact on thebusiness during 2010 with combined revenues increasing from €46m to €67m.
As is the case with most defined benefit pension funds, An Post’s scheme falls short of meetingthe necessary Minimum Funding Standard, despite its deficit reducing to €368m last year from €403mthe previous year and €582m in 2008. The Company is working with the Trustees and employeerepresentatives on the development of an agreed plan to address this situation.
Chief Executive Donal Connell said that An Post achieved improvement across all key aspects ofits business – quality of service, cost containment and the broadening of the revenue base. “Wewill continue to align the company, its structures and resources with the changing business realityand we look to the future in this fully liberalised mails market with confidence and a strongbelief in our ability to deliver on every level.
“As a critical channel for every aspect of Irish life and business, a major employer across theState and a significant buyer of goods and services, An Post can be relied upon to play a full andactive part in the national recovery programme,” he added.
