Fall in delivery volumes to reduce Posti’s incomes by 75 million euro – the company will start cooperation negotiations


Posti has to adapt its operations due to a sharp fall in mail delivery volumes and changes in customers' needs. This year the fall in delivery volumes will reduce Posti's net sales by 75 million euro. To secure profitability, Posti will launch cooperation negotiations, in which the preliminary reduction need for permanent personnel in production, administration and sales and customer service is no more than 860 people.

The Finnish postal and communications industry is undergoing a very dramatic structural transformation as the result of digitalization. Communication will increasingly take place via the Internet, while the delivery volumes of printed mail are constantly falling. Last year the number of delivered letters and other addressed shipments decreased by 102 million (-8%) from the previous year.

In 2015, the fall in delivery volumes reduced Posti's incomes by some 75 million euro, and this year the loss in net sales is expected to be about the same. Posti's result would turn markedly negative without efficiency improvements and other remedying actions.

- Digitalization has already reduced overall delivery volumes to the level of the 1960s. Therefore, we must adapt and reform our operations in order to ensure that Posti will still maintain its financial capability to build new business in order to compensate for mail delivery. The transformation is historically dramatic so, unfortunately, we also have to target savings to our personnel. I´m confident that in future we can also create jobs, especially in parcel and logistics services, says Heikki Malinen, President and CEO of Posti.

According to Malinen, Posti's current result is not in line with the target level. The new collective agreement obtained for the postal industry was a step in the right direction for reforming Posti's operations. However, it did not reduce Posti's payroll costs.

- Posti's cost structure is still too high. We can only cope, invest and maintain jobs by operating in a competitive manner, Malinen points out.

Posti to commence cooperation negotiations in Finland

As part of its planned adaptation measures, Posti will commence cooperation negotiations in Finland on February 2, 2016. The preliminary reduction need for permanent personnel is no more than 860 people. The aim is that as much of the reductions as possible can be carried out through voluntary arrangements, retirement, lay-offs and other actions. Some employment relationships will also be turned into part-time employments. A more precise need for reductions will be determined during the co-operation negotiations.

The negotiations concern the organizations of Posti Group Corporation, Posti Ltd and Posti Kiinteistöt Ltd in Finland. The need for personnel reduction concerns basic delivery in production, the entire sales and customer service, and the administration.

The change does not concern Posti's other services, such as early-morning newspaper delivery, mail sorting in postal centers and logistics centers, parcel, freight and warehousing services or Posti's service point network (postal outlets, parcel points and pickup points).

The sphere of negotiations covers a total of some 7,600 permanent employees. Posti's personnel on September 30, 2015, numbered 21,187 persons.

The Uusi polku support program helps people find a job

As a responsible employer, Posti is actively involved in supporting its personnel in the current changing situation in the postal industry. All dismissed persons have access to the Uusi polku (New Path) program, which offers training and support for job seeking, retraining, or becoming an entrepreneur.

The nature of delivery work will change with new services

Post also wants to reform its delivery services in order to address customers' new needs. Service times in deliveries will be extended towards evening, which according to Senior Vice President, Operations Yrjö Eskola allows the delivery of postal items and different types of services and products more flexibly to home than before.

- Mail delivery work is changing - deliverers already carry much more than just letters and publications. Extensive opening hours from morning to evening are very important to parcel services, the online store, home and safety services, food logistics and other local logistics services, Eskola points out.

Customers' habits related to shopping and the use of services are changing

Due to increased digitalization, Posti's customers increasingly do business through the Internet. People's mobility, use of time and service-related expectations have undergone a vast change in a few years.

The aim of changes to be made to customer service is to optimize the multi-channel environment. In future, web pages and chat will be the primary channels in customer services.