19.07.10 - Jersey Post announces further changes
Jersey Post has announced the next phase of its planned business-restructuring
programme to remove £4.9 million of cost by the end of 2011.
The radical cost reduction programme is necessary for its survival as the impact of ‘e’
substitution, and liberalisation of the postal market on the Island continues to reduce
traditional letter mail volumes and put pressure on profitability.
In January this year, the organisation announced the first part of its business
transformation plan with a voluntary redundancy programme for up to 80 workers and
the introduction of a new grade of ‘postal operative’, reducing its salary costs.
The organisation confirmed today that it is having to accelerate its cost reduction
programme, in response to mounting losses in its traditional postal operation and the
planned opening to competition of the fulfilment industry’s bulk packet mail market.
It is looking for up to a further 90 applicants for voluntary redundancy to implement
the next phase of a multi-million pound cost reduction plan which affects staffing,
structures, business processes and automation across the whole business, top-to–
bottom.
Ian Carr, Chief Executive of the Jersey Post Group said: “The business transformation
plan to remove £4.9 million of costs over the next 18 months is essential for Jersey
Post’s future survival. We currently rely on income from the large postal volumes we
handle for the fulfilment sector, to fund the losses we incur in meeting the ‘universal
service obligation’ to the Island’s public.
“Planned further competition in the postal market and the continuing decline in
traditional letter mail volumes makes reducing the scope of the universal postal
service and shrinking our cost base vital to remove the reliance on cross subsidy.”
He went on to say: “Jersey Post’s profits collapsed last year as letter mail volumes
tumbled, profits in the fulfilment sector fell and growth in it slowed. With forecast
losses about to be compounded by further competition, Jersey Post will become
insolvent within a few years unless it takes radical action now.
“This is a difficult time for the business and its people, but we continue to work
closely with the Communication Workers Union (CWU) as we adapt to the dramatic
changes impacting postal businesses across the world as technology and competition
impact on traditional ways of providing services to their customers.”