1,975 jobs to go as losses continue at An Post

A 7% decline in traditional mail volumes – including one percentage point related to weather disruption – helped continue losses at Ireland’s An Post in 2010. The company revealed its full-year results yesterday, which put group losses for the 12 months at EUR 24.7m.

Despite a 3.5% reduction in core operating costs, improved efficiencies and new revenue streams bringing an improvement on last year’s EUR 29.1m group loss, the post said it would be necessary to cut its work force by 1,975 full-time positions by 2015.

The decline in mail volumes prompted a 2.4% reduction in An Post’s mail division revenues, with the unit’s 2.5m average daily volumes accounting for EUR 552.3m of the group’s EUR 805m turnover.

Ongoing difficulties in the Irish economy have been compounded by electronic substitution of physical mail, while heavy snowfalls in late November and December were blamed for the decline in the An Post mail business, along with increasing market competition.

An Post subsidiary companies helped offset some of the losses, with non-core activities boosting subsidiary revenues from EUR 46m in 2009 to EUR 67m in 2010.

During the year, An Post took a EUR 20m hit from severance and early retirement pay-outs, with the group cutting 331 jobs last year – the main way in which EUR 26m operating cost reductions were achieved.

Meanwhile costs from winding-down the Postbank added EUR 6.6m to the bill for 2010, while pension charges cost EUR 3.9m. An Post’s pension is running at a EUR 368m deficit – an improvement on 2009’s EUR 403m shortfall, but nevertheless falling below accepted standards.

An Post, which also cut 402 full-time positions in 2009, said the nearly-2,000 job losses that will come over the next few years are needed to cope with the “business realities” the group is facing.

It is hoping much of the reduction in work force will be achieved through attrition and voluntary exit schemes, as well as a reduction in overtime.

John Fitzgerald, the company chairman, insisted yesterday that despite the “difficult” economic environment, An Post was proving it can adapt to the changing circumstances.

EUR 47m was invested during the year, he said, to boost parcel and packet services and new retail products – areas he said were “critical” to the company’s future success.

He said: “An Post will continue to invest in the foundations of future business whilst adapting to the commercial realities which continue to unfold for Ireland and for the global postal sector.”

There were positives for the year in An Post’s retail segment, which saw steady increases in financial and communications service use, with customers adding a further EUR 3.1bn in savings during the year.

An Post, which said it had delivered record Quality of Service results in its home market for a fourth consecutive year, has been making improvements to its retail outlets, deploying online terminals and computerising rural post offices, while continuing customer service training programmes for both its own post offices and contractor-run branches.

Chief executive Donal Connell said going forward, his company would continue efforts to improve quality of service, cost reductions and a broadening of its revenue base.

“We will continue to align the Company, its structures and resources with the changing business reality and we look to the future in this fully liberalised mails market with confidence and a strong belief in our ability to deliver on every level,” he said.