DMC “sees no other option” but to discontinue its delivery organisation
Direct Mail Company AG (DMC) – a subsidiary of Swiss Post which distributes unaddressed advertising, such as flyers and leaflets, and free newspapers has announced plans to discontinue due to significant financial difficulties.
For years, the rapid pace of digitisation has meant that fewer and fewer physical advertisements are being distributed to private letter boxes.
DMC plans to have all consignments delivered by Swiss Post from June 2024. This measure would affect 3,855 DMC employees who deliver advertising on hourly wages, with very small employment levels of between three and eight hours per week. 72 full-time employees would also be affected. In total, this equates to 422 full-time equivalents (FTE). DMC wants to carry out this planned project in as socially responsible a manner as possible and is looking into mitigating provisions for the employees who are affected. The consultation process starts this week.
Due to ongoing digitization, the number of free newspapers and promotional mailings in private letter boxes has been falling drastically for years. Direct Mail Company AG (DMC) – a subsidiary of Swiss Post – has had to absorb a decline of a third of consignments over the past 10 years. Half of this decline is caused by the growing number of “No advertising” signs on private letter boxes (+1.5 percent per year). This was compounded by the loss of several major orders in the past two years. Daniel Truttmann, CEO of DMC, explains: “The loss of these orders paired with the constant decline in physical advertising means that we can operate our in-house delivery organization only at a loss.” New regional minimum wages and rising costs due to inflation, particularly for energy, have also had a negative impact on DMC’s costs. “In the last few years, we have worked hard on our efficiency, such as reducing delivery days and merging locations. Despite these measures, we would sadly have to continue operating our in-house deliveries at a deficit over the longer term, because we cannot reduce our rounds,” says Truttmann.
Planned discontinuation of the DMC delivery organization
Looking ahead, DMC sees no other option but to discontinue its delivery organization from 1 June 2024, subject to a consultation process, and to have its consignments delivered by Swiss Post. Swiss Post is now looking into the organizational changes required to ensure that promotional materials for DMC’s customers can still be distributed reliably. The closure of the in-house delivery organization would mean a staff reduction of 422 full-time equivalents (FTE) at DMC. The measure would affect around 3,855 people who distribute advertising on hourly wages, with very small employment levels of between three and eight hours per week (eight to 20 percent of a full-time position), and 72 staff members with employment levels of between 70 and 100 percent. Basel-based DMC would remain in operation and would continue to employ 132 staff members across Switzerland for preparation and marketing of the Consumo product. Consumo is the four-page carrier medium in which customers can place their advertising.
“The planned project is not easy for us”
DMC is starting the consultation process this week. All DMC employees can submit their proposals for preventing the planned staff reduction or for mitigating its impact. Daniel Truttmann, CEO of DMC, reiterates: “We have not been able to offset the decline with our measures. For this reason, we see no other option than to take this painful step – subject to the consultation process. The planned staff reduction is anything but easy for us. Even for those on very small employment levels, these jobs provide an important source of additional income. We are now doing our utmost to support those affected as comprehensively as possible.”
DMC would aim to introduce social mitigating provisions such as financial measures or help with looking for jobs. The consultation process will run until mid-November 2023. Afterwards, DMC will work with its social partners to establish the details of a possible social plan. Swiss Post will support its subsidiary during all these phases.
