Austrian Post is poised to announce a major cost-cutting programme after losing a valuable parcelscontract this week.
Mail-order company Quelle Austria is switching about seven million parcels a year to HermesLogistik from January onwards, it was announced on Wednesday. Hermes had already taken over parceldeliveries for its parent, mail-order firm Otto, in Austria.
Austrian Post warned that this latest lost contract would depress its operating profit byabout EUR 20 million next year, and stated it was planning to speed up planned restructuringmeasures in response.
The company’s share price crashed by 14% on Wednesday following the news, and fell a further3.75% to EUR 23.10 on Thursday.
Austrian newspaper Die Presse reported today that with the loss of both Otto and Quelle,Austrian Post would lose about one third of its 47 million parcels in 2008. “It is obvious that wemust adapt our capacity,” it cited chairman Anton Wais as saying.
Wais will present a cost-cutting plan to the supervisory board next Monday, the newspaperwrote. He declined to say how many jobs could be at risk but confirmed negotiations with unionswould begin immediately after the supervisory board meeting. About 1,000 of Austrian Post’s 24,400delivery staff are reportedly parcel delivery employees.
Wais stressed that Austrian Post would re-double its efforts to keep other B2C customers,would also step up its growth plans in the B2B sector and accelerate its international growthstrategy in order to compensate for the downturn in the private parcels business.
