AN POST is planning to cut more than 200 jobs from its workforce and is seeking agreement from its unions not to pay staff an increase due under the national pay deal.
This emerged yesterday following the publication of An Post’s annual report which showed that turnover last year declined by 2.9 per cent to €850 million, although its operating profit rose by 7.2 per cent to €31.2 million. Mail volumes declined by 2 per cent in 2008.
An Post chief executive Donal Connell told The Irish Times the company also wanted to agree a funding plan with staff to address a €582 million deficit in its defined benefit pension scheme.
This deficit increased five-fold last year on the 2007 figure of €114 million, and reflects the collapse in investment returns due to the global economic meltdown.
“We need to come up with a funding plan jointly to satisfy the Pensions Board by next year.”
Mr Connell said these cost-cutting measures were vital to the company as it sought to weather the recession. He expected mail volumes to decline by about 9 per cent this year, in line with the fall in the economy as a whole.
On jobs cuts, Mr Connell said: “We expect to see another reduction in head count this year.”
He added that this was likely to involve a “couple of hundred” full-time equivalent (FTE) staff or “potentially more”. An Post employs 10,970 FTEs.
“A lot of this is driven by efficiencies ,” he added.
He said the job cuts would be across the board, but would mostly affect the mails division.
On the pay freeze, which is likely to be resisted by unions on the basis that An Post is profitable, Mr Connell said: “2008 is almost like a different century at this stage for businesses. We have to look at what the picture is in 2009 and next year.”
He said An Post was also seeking to reduce non-payroll costs by €12 million to €15 million.
Mr Connell earned €493,000 from An Post last year, but waived his right to a performance-related bonus which could have netted him up to €94,750. He felt “it was the appropriate thing to do in the circumstances”.
While mail volumes were under pressure, Mr Connell said its retail business was performing well with “an increasing uptake in NTMA [savings] products”.
The sharp rise in social welfare payments throughout the State has also benefited its network of post offices.
An Post’s annual report shows the company booked a €9.7 million loss from its 50 per cent share of Postbank. This would indicate that Postbank made a loss of €19.4 million in 2008 in its first full year of operation.
Postbank is a joint venture with Fortis, a Dutch/Belgian bank that is in the process of being acquired by BNP Paribas. Mr Connell said Postbank would be in “investment mode” for some time. “We are happy with its progress.”
Postbank’s plan to offer mortgages appears to have been put on ice. “It’s something we’re still considering but I’m not sure [what we’ll do] at this point in time.”
