Finnish postal group Posti will start negotiations with unions tomorrow (Tuesday) over up to 860 job losses after warning of a revenues drop due to declining volumes.
The company announced last week that it expects net sales to fall this year by €75 million due to the accelerating fall in mail delivery volumes driven by changing customer needs. It already saw a similar decline in 2015, and warned that it could make a significant loss without action.
"To secure profitability, Posti will launch cooperation negotiations, in which the preliminary reduction need for permanent personnel in production, administration and sales and customer service is no more than 860 people," the company said.
The Finnish postal and communications industry is undergoing a very dramatic structural transformation as the result of digitalization, Posti explained. Communication will increasingly take place via the Internet, while the delivery volumes of printed mail are constantly falling. Last year the number of delivered letters and other addressed shipments decreased by 102 million (-8%) from the previous year.
"Digitalization has already reduced overall delivery volumes to the level of the 1960s. Therefore, we must adapt and reform our operations in order to ensure that Posti will still maintain its financial capability to build new business in order to compensate for mail delivery. The transformation is historically dramatic so, unfortunately, we also have to target savings to our personnel. I´m confident that in future we can also create jobs, especially in parcel and logistics services," said CEO Heikki Malinen.
According to Malinen, Posti's current result is not in line with the target level. The new collective agreement obtained for the postal industry was a step in the right direction for reforming Posti's operations. However, it did not reduce Posti's payroll costs.
"Posti's cost structure is still too high. We can only cope, invest and maintain jobs by operating in a competitive manner," he added.
As part of its planned adaptation measures, Posti will commence cooperation negotiations in Finland tomorrow (February 2). The aim is that as much of the reductions as possible can be carried out through voluntary arrangements, retirement, lay-offs and other actions. Some employment relationships will also be turned into part-time employments. A more precise need for reductions will be determined during the co-operation negotiations.
The negotiations concern the organizations of Posti Group Corporation, Posti Ltd and Posti Kiinteistöt Ltd in Finland. The need for personnel reduction concerns basic delivery in production, the entire sales and customer service, and the administration.
The change does not concern Posti's other services, such as early-morning newspaper delivery, mail sorting in postal centers and logistics centers, parcel, freight and warehousing services or Posti's service point network (postal outlets, parcel points and pickup points).
The sphere of negotiations covers a total of some 7,600 permanent employees. Posti's personnel on September 30, 2015, numbered 21,187 persons.
Post also wants to reform its delivery services in order to address customers' new needs. Service times in deliveries will be extended towards evening, which, according to Yrjö Eskola, Senior Vice President Operations, allows the delivery of postal items and different types of services and products more flexibly to home than before.
"Mail delivery work is changing – deliverers already carry much more than just letters and publications. Extensive opening hours from morning to evening are very important to parcel services, the online store, home and safety services, food logistics and other local logistics services," Eskola pointed out.
Due to increased digitalization, Posti's customers increasingly do business through the Internet. People's mobility, use of time and service-related expectations have undergone a vast change in a few years. The aim of changes to be made to customer service is to optimize the multi-channel environment. In future, web pages and chat will be the primary channels in customer services.
