PostNord has announced more mass redundancies are to take place over the next three years to meet the fast-paced growth of digitization.
A new production model is being introduced to reflect the changes to digitization last year, resulting in the current production process and separate infrastructure for mail being phased out.
Since 2000, mail volumes in the Danish business have fallen by 80%, contributing to a reduction of around 3,000 jobs since 2013. Another 3,500 to 4,000 jobs are now to be axed in Denmark over the next two to three years.
The transformation of the business is expected to cost around SEK3bn (US$33.2bn), which PostNord is in talks with the owners about financing.
To further secure PostNord’s competitiveness in all markets, the Group’s administrative costs will also be further reduced by more than SEK1bn (US$11bn) over the next three years.
This is expected to affect some 1,200 full-time employees, including 500 that are already included in the transformation in Denmark. The major part of the cost-cutting program is to be completed by the end of the 2019 financial year.
Håkan Ericsson, president and Group CEO of PostNord, commented, “More than three years ago, PostNord laid out a strategy under which the Group was to be transformed from a postal corporation with a certain volume of parcel business, into a competitive Nordic logistics and communication group with a close focus on the growing e-commerce sector.
“The strategy, which has been systematically implemented at a high tempo, is still the right one, but in view of the accelerating losses of mail volumes, the pace of the transformation must be further increased. We are now taking further steps to secure PostNord’s competitiveness in all markets by cutting costs in our administration functions.”
“Once the transformation of the Danish business is complete, we will have a scalable and financially sustainable production model that will make it possible to maintain the universal service with a profitable mail business, even with low mail volumes.”
March 9, 2017
