An Post losses of €47m put 1,500 Irish jobs at risk

Up to 1,500 staff at An Post could be facing redundancy as the company attempts to tackle a crippling trading loss for this year, now put at €47 million.

The company yesterday announced a recovery plan designed to return it to a break-even position by 2005. This envisages between 1,000 and 1,500 redundancies, said Mr Ciaran McGivern, its financial controller.

Unions at the company have been informed, and the drive to reduce staff numbers begins immediately. A spokesman for An Post said staff reductions would be sought after each section of the company was examined in detail. A voluntary redundancy and early-retirement scheme would be used.

Describing the company's current financial position as "unsustainable", Mr McGivern said An Post was committed to the "radical changes" needed to break even.

While management was confident the company would return to financial health, 2004 would not be a great year either, with a trading loss of €39.1 million expected.

He said there would be no reduction in the level of service to the public.

The number of people working at An Post has been growing steadily since 1998. According to the company's last annual report (for 2002) it employs 10,090 people.

The biggest group of workers are postmen and women, comprising 4,547 staff.

As well as redundancies, the company is also seeking to accelerate existing productivity programmes with unions. The company believes it can produce additional non-staff savings of €10 million in 2005.

Mr McGivern stressed that making savings was not the company's only response to the crisis, and that revenue enhancement was also needed.

Despite yesterday assurances, the Minister for Communications, Mr Ahern, has demanded a full recovery plan within a month outlining how the company is going to address its financial woes. An Post has indicated it will comply with this.

Mr Ahern has also described earlier financial information supplied to his Department as "seriously inaccurate". He made his comments in a letter to An Post's chairwoman, Ms Margaret McGinley. Ms McGinley, a solicitor from Donegal, was appointed by the Minister in February.

An Post declined to comment officially on the Minister's statement, although sources at the company insisted that reliable financial information had been supplied to the Department at regular intervals.

Despite this, Mr Ahern said last night he was putting in place a process whereby An Post management would brief his senior officials monthly on the progress of the recovery plan. His officials will have to be presented with written progress reports, said a statement.

In addition, the Minister is seeking a report within a month "outlining how the present state of affairs occurred, including how the company board exercised its oversight function in relation to the financial well-being of the company".

The company conceded yesterday that its forecasts for growth in 2003 were overly optimistic. As a result, a loss of €10.4 million is expected in its letters division in 2003.

Mr McGivern said the company had forecast growth based on the experience in previous years of 4.8 per cent for this division, but in 2003 this had not materialised.

He said that growth in the second quarter of this year was zero in this division, and the rest of the year would only have growth of about 2.2 per cent.

He said a lack of progress in "optimising" An Post's postal routes in 2003 would create a loss of €13 million. A certain portion of this related to the refusal of ComReg to sanction a new system of compulsory post boxes on rural roads and lanes.

He said the company had hoped to have a price rise in place in April of this year, but that this had only materialised several months later.

The delay in getting the rise would cost the company €3.4 million this year, Mr McGivern said. Losses in its parcel division, SDS, would cost the company €7.5 million, he added.