Privatisation of Austrian postal service likely in 2006

Osterreichische Post (Post Austria), the 100percent state-owned mail service provider, is currently in the midst of a large-scale restructuring process aimed at streamlining operations and reducing costs ahead of the government’s objective to privatise the company in 2006 (a final decision on the sale is expected to be taken in September 2005). Post has cut its workforce by more than 5,000 employees over the past four years, and this, coupled with other cost-saving measures such as reduced overtime and the hiring of part-time workers, has turned the traditional loss-making firm into a profitable enterprise. In early May the company announced plans to close 310 post offices (out of a total of 1,640) by the middle of 2005, generating annual savings of EUR23m. All provinces will be affected, with Lower and Upper Austria hit particularly badly. Post has attempted to dampen the criticism of this move by claiming that either a “post partner” or the municipal governments will provide postal services in two-thirds of the communities set to lose their post offices. At the same time as the company is instigating a cost-cutting strategy in Austria, Post is expanding into eastern Europe and over the past year has achieved strong growth in the parcel business in countries such as Slovakia, Slovenia and Croatia.