Itella is to restructure operations in its home market of Finland, retaining separate postal andlogistics services units but merging sorting, transporting and delivery operations into a single
operation, with the loss of up to 319 administrative jobs.The Finnish group said the new organisation, following a group-wide restructuring earlierthis year in response to the heavy decline in mail volumes and the difficult logistics marketsituation, would improve its customer focus and financial competitiveness.
In parallel, the company will launch a new two-year performance improvement programmetargeting a further €75 million worth of savings in 2015-16 after the €100 million savings targetfor 2013-14 was fully achieved ahead of schedule.
CEO Heikki Malinen said: “The rapid increase of digital communications and the economicrecession have had a dramatic impact on the postal and logistics industry. This has forced us tomake difficult structural decisions in order to ensure postal services to Finnish citizens andmaintain the company’s profitability. By restructuring our organisation to make it clearer and morecustomer-focused, we will respond to our customers’ expectations, reduce administrative costs andrespond to the increasing international competition in the Finnish market.”
From next January, Itella Finland will be organised into two sales-based organisations, ‘Postal Services’ and ‘Parcel and Logistics Services’ and one Operations unit. The company hasalready announced that it will offer all services in Finland under the popular ‘Posti’ brand fromnext year, dropping the ‘Itella’ brand for its logistics services.
The Postal Services unit, offering letter, publication and marketing services, will beheaded by Senior Vice President Jani Jolkkonen, who was previously in charge of Itella Logistics.Parcel, transport and warehouse logistics will constitute a new business group named Parcel andLogistics Services, headed by Senior Vice President Jukka Rosenberg, who was previously in chargeof Itella Mail Communications.
The production operations of sorting, transporting and delivery services in Finland will becombined into a new Operations unit, headed by Vice President Yrjö Eskola. Combining the productionoperations of Mail Communications with the domestic transport operations of Logistics allows thecompany to leverage internal synergies, thereby improving quality and cost-effectiveness, Itellaexplained.
Itella will start talks next week with unions over the restructuring, which concern a totalof 2,234 employees. The company expects at most 319 employees to lose their jobs, primarily inexpert and supervisory positions in administration as well as production planning and supervisoryduties. The reduction need does not concern Posti’s service points or production duties, such aspostal workers employed in mail sorting or delivery duties, drivers or the employees of servicewarehouses and address services.
The organisational changes do not apply to the eCommerce unit established by Itella lastyear, which will continue to provide and develop e-commerce solutions, nor to OpusCapita and ItellaRussia, which will both continue as separate business groups as before.
“In Scandinavia and the Baltic countries, the first priority is improving profitability. Wewill develop our logistics services and seek growth in these markets from parcel and freightservices as well as logistics solutions for e-commerce,” Malinen said.
According to Malinen, Itella’s renewal is largely directed by changes in customer behaviour.For instance, the growing popularity of e-commerce means that customers expect Posti’s network ofservice points to provide a wide range of alternatives for sending and receiving parcels, as wellas longer opening hours.
“The growth of e-commerce, the increasing re-evaluation of supply chains brought about bythe transformation of the retail industry and the growing demand for local logistics services willprovide many new positive growth opportunities for Itella. With new operating model we are buildingthe new Posti as a modern service provider. We will increase the number of service points furtherand bring them closer to consumers and entrepreneurs. We will also invest in digital services,” headded.
