Norwegian Postal service eyes major cuts
The head of the Norwegian postal service (Posten) wants to get out of the state-mandated banking business and shut half of its post offices around the country. That’s not popular, either among the public or politicians. Record profits aren’t enough to keep postmaster general Dag Mejdell happy. Dag Mejdell, who recently took over as Posten’s chief executive, unveiled record profits this week but nonetheless wants to further cut overhead. The postal service already has been through a major reorganization that closed traditional post offices and re-established some as kiosks inside grocery stores. That hasn’t been enough, Mejdell thinks, to cut costs sufficiently. Now he also wants to shut down as many as 150 of the 303 post offices left in Norway. “The analysis we have done indicates that there’s no economic foundation for them,” Mejdell told newspaper Dagens Næringsliv on Tuesday. Closing half the country’s post offices would save around NOK 500 million a year, he figures.
Around 1,000 postal workers would likely lose their jobs, however, and customers already unhappy about reduced postal services are likely to complain loudly. Politicians, especially those representing Norway’s outlying districts, already are.
They point to Posten’s record pre-tax profits of NOK 1.4 billion in 2005, and contend Posten simply wants to make more money. Its recent development as a capitalistic enterprise, argued one member of the Socialist Left, shouldn’t come at the expense of public services.
Mejdell also is facing a battle over his goal of eliminating Posten’s bank services, which now are mandated by law. Postbanken is a money-loser for Posten, with the number of transactions steadily declining in line with postal transactions, as customers move over to electronic post and banking.
