Czech Post Office wants to save billions by closing branches and laying off thousands of people

by   CIJ News iDesk III
2023-03-16   07:01

The Czech Post expects to save billions of crowns in operating and wage costs by closing 300 of its 3,200 branches. The closure of branches is expected to include the departure of several thousand employees by July 1 this year. Matyáš Vitík, a spokesman for the post office, told the Czech News Agency. Trade unionists do not agree with the job cuts. They have not yet received concrete information about the redundancies at the end of June, but are waiting for it by the end of the month so that the management meets the legal deadlines, the company announced.

Vitík said the exact number of employees to be laid off from the current 25,000 or so will emerge from the list of post offices to be closed. It has not yet been finalised and the post office plans to publish it when it is final and unchanged. Interior Minister Vít Rakušan (STAN) has only repeatedly stated that post offices will not be closed in municipalities where there is only one branch.

"However, this does not mean that all employees will be dismissed from the closed branches. Many of them will find employment at other post offices. We will judge this by job performance, pro-customer attitude, annual employee evaluations and so on. Similarly, we are talking about letter delivery, where the DEPO law and the mandatory data boxes for more than two million people have a strong impact on the volume of shipments," Vitík added.

According to Jindřiška Budweiserová, the chairwoman of the largest postal union, the post office has been looking for savings since 2013, given that it has to provide loss-making services as mandated by law. Over the past four years, it has made major organisational changes, eliminating more than 7,000 positions and saving CZK 1 billion in costs. This is still not enough and the economic situation continues to deteriorate.

"Despite this, the Post Office still operates 3,200 post offices, provides services and delivers parcels throughout the Czech Republic. Postmen have a heavy workload, they work under stress for very low wages. The abolition of branches and thousands of other jobs may mean savings, but unless the system of setting up and financing the public postal service changes, it is only a temporary solution. We do not agree with job cuts, we want a systemic change so that the post office and the postal workers have a future," said Budweiserová.

According to Trinity Bank economist Lukáš Kovanda, reducing the number of branches and employees at the post office makes sense in an international comparison. The Czech Republic has long been one of the countries with the highest number of people employed in postal services. In the European Union as a whole, this number has been steadily declining; for example, between 2008 and 2018 it fell by 12.5 percent, while in the Czech Republic it was significantly less. As recently as 2018, the Czech Republic had the highest number of postmen per 10,000 inhabitants in the EU, after the UK. In the Czech Republic, the postal service employed around 60 people for every 10,000 inhabitants. The Czech Republic was followed by Slovakia (58), Hungary (55) and Slovenia (51). By contrast, Portugal, Greece and Cyprus have the fewest postmen, with 17 for every 10,000 inhabitants.

According to Eurostat data from 2021, the latest available, 47,400 people worked in the postal services in the Czech Republic. For example, in Belgium, which has almost a million more inhabitants, 42,300 people worked in the postal services the year before last.

"Eurostat statistics include both postal and mail services. However, it reflects to a significant extent the above-average number of employees that the state-owned enterprise Česká pošta has compared to its counterparts in other EU countries. Even in the light of these figures, it is clear that the decision to downsize the company and gradually get rid of seven thousand jobs is socially and politically difficult, but in the current conditions it is the right one," Kovanda added.

Czech Post reported a loss of around CZK 1.5 billion last year. According to the Austrian, it needs to start transformation, otherwise it will end up in insolvency at the end of the year.

Source: CTK