An Post to cut another 1,300 jobs in major shake-up

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An Post to cut another 1,300 jobs in major shake-up after €17.5m loss

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AN POST must cut another 1,300 staff by 2016, restructure its pension plan and may link the price of stamps to inflation, after recording a loss of €17.5m last year.

This was its first trading loss since 2003 and down from a €2.2m profit in 2011.

The semi-state post service says the Universal Service Obligation – which requires it to pick up and deliver post to every household and business in the country at least once a day – is "clearly unsustainable".

This obligation cost An Post €60m last year.

But a spokesperson told the Irish Independent that it has no plans to charge customers in rural areas more for its service – instead, national prices may be raised for all.

A proposal is being prepared by regulators ComReg whereby postal prices could be linked to inflation as soon as next year – meaning a potential hike every year, since inflation has risen every year for the past 20 years, except in 2009.

"We must be able to price our products and services according to market forces," said spokesperson Anna McHugh.

This month the post office increased the price of a standard stamp by just under 10pc, from 55c to 60c.

An Post has been challenged by a decline in post volumes, down 5pc in 2012 alone and 27pc since 2007, as a result of the recession and the move by consumers to electronic forms of communication.

It has let go 1,284 "full-time equivalents" since 2009 – the number of people affected by this is likely to be higher than that figure, since multiple part-time employees might be counted as just one full-time equivalent.

These lay-offs have reduced labour costs by €53.4m. Some 350 left the company last year.

Another 1,316 must be let go by 2016. An Post says the achievement of this target "continues to be a priority".

Reform

Its pension scheme had a €285m deficit in 2012, down from a €484m deficit in 2011. Most of its pensions are in a defined benefit scheme, where a company is liable for all pension commitments and must pay out even if the pension fund's investments lose money.

An accounting charge relating to the pension deficit meant after-tax losses totalled €39.4m.

An Post says it is finalising a plan to reform the scheme, which is due at the end of June, and will be put to its unionised staff. Chief executive Donal Connell (pictured) was paid €438,495 last year, down from €495,000 in 2011, including a pension contribution of €77,000.

Its subsidiaries such as insurance provider One Direct and The Gift Voucher Shop did well and are not seeing job losses.

Subsidiaries recorded revenues of €111m compared to €80m in 2011, generating €8.5m in profit before tax. Retail services such as foreign exchange and savings accounts also performed well.