Australia Post will slash almost 2000 jobs over the next three years as it wrestles with diving volumes of letters.
The company said on Friday that losses in its mail delivery business were approaching $500 million this financial year, taking losses to more than $1.5 billion over the past five years.
It is understood that 1900 jobs will be axed from the postal service provider through a voluntary redundancy program.
There will be no forced redundancies.
“We have reached the tipping point that we have been warning about where, without reform, the business becomes unsustainable,” Australia Post managing director Ahmed Fahour said in a statement.
“We welcomed the federal government’s decision to support reform so we can manage the mail service losses, meet the changing needs of our customers and continue to invest in growing parts of our business such as parcels and trusted services.”
Mr Fahour said there would be no change to postal deliveries five days a week.
The company has established a fund to retrain and redeploy staff as part of its “commitment to protect our employees, our post offices, and the community”.
The fund will include $190 million provision for voluntary redundancies.
The dramatic profit dive was driven by mounting losses of $151 million in its letters business. Letter volumes have also posted their largest decline since they first started falling in 2008, down 8.2 per cent in the past six months.
The losses in its letters business are so big they are forecast to overwhelm the profit in its parcels business.
Mr Fahour used the dire forecasts of a company-wide loss to highlight the need for urgent regulatory reform of the company’s letters service.
Mr Fahour said the company wanted to slow the delivery of non-urgent mail and charge a premium for customers who still want to use its regular service. It also wants the right to increase the price of stamps.
“The immediate challenge for our business is clear,” Mr Fahour said on Monday.
“We have been carefully managing the real decline in our letter volumes for the past seven years, but we have now reached a tipping point where we can no longer manage that decline, while also maintaining our nationwide networks, service reliability and profitability.
“We urgently need reform of the regulations that apply to our letters service.”
Mr Fahour said a government-commissioned report last year predicted that Australia Post would incur $12.1 billion cumulative losses in letters, and $6.6 billion for the enterprise over the next 10 years, without regulatory reform.
He sought approval from the Abbott government to allow Australia Post to introduce a new regular letters service for non-urgent consumer mail delivered two days later than the current schedule, and to charge a premium for customers wanting to use its existing daily timetable.
He also wanted the power to increase stamp prices to better reflect the cost of running the letter service.
source:- http://www.smh.com.au/business/australia-post-slashing-jobs–reports-20150626-ghy759
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