Japan Post to cut 17,000 jobs as it prepares for privatisation
Japan’s mammoth postal service will cut its workforce by 17,000 by March 2005 to prepare for full privatisation, a key reform pledge of Prime Minister Junichiro Koizumi, its new head said.
In the biggest change in the 132-year history of the postal services, Japan Post was revamped as a corporation in April this year as a first step towards full privatisation targetted for 2007.
The government monopoly on postal services came to an end as mail services were opened up to the private sector, albeit under strict conditions that have failed to attract many applicants.
Japan Post will trim its workforce from the current level of 280,000 to 263,000 “while achieving better productivity” and cutting procurement costs by 20 percent from 2001 levels in the fiscal years to March 2004 and March 2005, Masaharu Ikuta said at a lunch with foreign correspondents.
“After 132 years of bureaucracy we have to put the largest importance possible on having our staff realize that the three postal services are in the services industry” and not in the public service, he said.
Lauded as a champion of reform for helping resuscitate shipping firm Mitsui O.S.K. Lines, Ikuta was appointed by Koizumi to the helm of the body combining postal services and 355 trillion yen (3.2 trillion dollars) in savings and insurance funds, which mean it is widely regarded as the world’s largest bank.
Over the same period, Japan Post is planning to spend 90 billion yen to improve efficiency at its network of 24,700 post offices across the country.
Facing stiff competition from email and private parcel delivery companies, the postal services arm was 22.5 billion yen in the red in the year to March 2003 but is expected to make a net profit of five billion yen in the year to March 2004, Ikuta said.
“This competition is very difficult … We have checked the experience of Deutsche Post and other post (services) that have been privatized,” Ikuta said.
On Monday, Koizumi vowed to make privatization of the postal services a campaign pledge in answer to opposition questioning on the floor of the lower house of parliament.
“This is the core of the structural reform of the bureaucracy from here on,” he said.
Koizumi is widely expected to dissolve the lower house in October and call a November general election having just been re-elected ruling party leader and reshuffled his cabinet.
Koizumi came into office in April 2001 as a champion of postal service reform, a pet project stemming from his days as minister of posts and telecommunications in 1993.
