Australia Post today confirmed plans to reduce the size of its headquarters and administration and direct valuable resources to support frontline customer services and initiatives.
Under an announced restructure, the Australia Post Group will reorganise around its two key brands:
Australia Post: Combining the existing retail and communication management services units, to provide trusted services and solutions for consumers and small businesses both online and through our post office network. Such services will be on behalf of corporations and government; and,
StarTrack: Bringing the former Post parcels and express services business under the StarTrack banner to provide ecommerce-driven logistics, supply chain and parcels delivery solutions for local and international businesses and online marketplaces.
The two business units will be supported by a leaner administration. Practically, this will mean a net reduction of approximately 900 managerial, administrative and support roles over the next 12 months, with the majority of the losses to come from the head office in Melbourne. While the impact in other states and centres will be small, details are still to be worked through.
Employees working in Australia Post's customer-facing roles, for example posties and retail stores, will not be impacted.
Australia Post Managing Director and CEO Ahmed Fahour said: "Supporting our people through this change is our top priority. I want to reassure all of our employees that we have a strong history of working closely with our people as we implement major change. We have robust, well-established processes to manage these situations respectfully. We will also consult with the appropriate representatives of our employees throughout this process."
Mr Fahour said that while each and every job loss is deeply regrettable, Australia Post has to continue to evolve to remain sustainable in the face of the dramatic impact of a declining letters service and an increasingly competitive parcels market.
He said customers were overwhelmingly changing their preferences as indicated by the decline in letter volumes of approximately 30 percent over the last five years. Based on overseas experience, this decline in Australian letter volumes is expected to accelerate to between 8 and 12 percent per annum in the coming years.
"Losses in letters are now, for the first time, overwhelming the profits we make in parcels. Furthermore, without postal services reform, the losses in our letters business will reach a billion dollars per annum within a few years. By making these changes now, we can minimise the impact for our people, our broader workforce, our business and the community."
"Postal businesses around the world are facing similar challenges. We have a plan to transition Australia Post to become a modern postal and parcel service that meets the contemporary needs of the Australian community. But to make that transition, we have to continue to reform our business - and we need support from the community and the government in terms of regulatory change."
"The Australian community wants to see us succeed. They want us to handle this transition in a way that maintains our nationwide retail and delivery networks. So we are absolutely committed to maintaining our post offices in communities everywhere - and our extensive delivery networks which reach all 11.2 million addresses across Australia."
"We are intent on expanding the range of trusted services that we offer in our post offices - and extending the accessibility and convenience of those services. That's why we have announced that we will open our post offices on Saturdays from this November."
"As the community becomes less reliant on our letters service, we need to fundamentally reform it. That's why we have recently introduced an additional 'Regular' letters service for business customers that is delivered according to a slower timetable and at a lower price than the 'Priority' letters service that Australians are used to receiving 5 days a week.
"These kind of changes give us the ability to transfer more of our resources from the declining letters service to our growing parcels and trusted services businesses. For example, today our posties are able to deliver 25 percent of their rounds with parcels compared to virtually zero only a few years ago.
"We have already been doing this for some time now and we are, overall, a leaner organisation than we were four years ago."
"We need to continue to find ways to reduce our cost overheads and operate more efficiently, while redirecting our resources into those services that the Australian community want and value. That is why we are protecting customer-facing roles in this restructure."
Mr Fahour said cost savings were essential to ensure Australia Post could continue to offer trusted services at a competitive price and to help pay for new services and initiatives that customers were demanding.
He said the cost savings from the announced job cuts would be less than the cost of additional services like the recently announced extended trading and delivery times to Saturday later this year.
Mr Fahour said Australia Post's customers were providing "loud and clear feedback that they want us to provide greater convenience and personalised choice - in both the physical and digital worlds".
Mr Fahour warned that without modernisation of Australia Post, supported by regulatory change, pressure on the business and its workforce would be magnified.
"The key for us is broad-ranging reform of our business. That involves changing our letter services, offering digital mail options, expanding the range of trusted services in our post offices, growing in parcels, and - most importantly - offering our customers greater convenience and personalised choice in how they deal with us," he said.