Australia Post to slash 1,900 jobs amid $500m mail losses; boss warns of 'tipping point' as letters business plunges
Exclusive by AM business editor Peter Ryan
Updated about 7 hours ago
Australia Post has announced major job cuts as the decline in its traditional letter delivery service continues to accelerate.
The ABC understands 1,900 voluntary redundancies will be offered over the next three years from metropolitan centres.
Australia Post has confirmed losses in its mail delivery business are approaching $500 million this financial year.
With the volume of ordinary mail expected to plunge by more than 10 per cent, Australia Post has warned it will report its first company-wide financial loss in more than 30 years.
The disruption created by email and other online message services has taken losses at Australia Post to more than $1.5 billion over the past five years.
Australia Post managing director Ahmed Fahour admits the decline in the mail delivery service is now critical.
"We have reached the tipping point that we have been warning about where, without reform, the business becomes unsustainable," Mr Fahour said this morning.
"We welcomed the Federal Government's decision to support reform so we can manage the mail service losses, meet the changing needs of our customers and continue to invest in growing parts of our business such as parcels and trusted services."
In announcing the voluntary redundancies, Mr Fahour confirmed there would be no change to postal deliveries five days a week.
However, earlier this year Mr Fahour flagged the possibility of a two-speed postage service for its loss-making letter deliveries business so it can focus on the lucrative opportunities in freight and parcel deliveries.
Mr Fahour said there would be no forced redundancies caused by the overhaul of the letters business and the focus would be on retraining and deployment.
"While reforming our business we have made a number of commitments to protect our employees, our Post Offices and the community," Mr Fahour said.
Under the proposals, Mr Fahour said he would protect Australia Post's national network of more than 4,000 post offices.
He said there would be financial support for licensed post offices and community postal agencies which make up 80 per cent of the business.
Australia Post said that, since October 2013, more than 4,000 staff have been transitioned into different roles with an emphasis on its fast growing parcels delivery business.
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First posted about 9 hours ago
HAVE YOUR SAY
38 comments
Score: 0
tigerredtail
6:17 PM on 26/06/2015
AP problem, why are they delivering post from China and the like for nothing..??????
Check out all the sellers on ebay from overseas mainly China and see what you can buy ' POST FREE ' for $1.00, then guess who is subsidising the deliveries!!!!
They hiked up all the eParcel contracts by up to 300% on some delivery legs and now if you do not pay on the due date they suspend your account and forget dealing with the ombudsman or ministers office as you will get action.
True the heads are all overpaid by millions and they do ' NOTHING ' to earn the money ' JOBS ' for the boys and yes they have and are talking about privatisation and that is why parcel charges have increased by 300% ++++
And yes this is a department / service owned by the people of Australia same as the airlines and other government departments sold to mates.
Check out all the sellers on ebay from overseas mainly China and see what you can buy ' POST FREE ' for $1.00, then guess who is subsidising the deliveries!!!!
They hiked up all the eParcel contracts by up to 300% on some delivery legs and now if you do not pay on the due date they suspend your account and forget dealing with the ombudsman or ministers office as you will get action.
True the heads are all overpaid by millions and they do ' NOTHING ' to earn the money ' JOBS ' for the boys and yes they have and are talking about privatisation and that is why parcel charges have increased by 300% ++++
And yes this is a department / service owned by the people of Australia same as the airlines and other government departments sold to mates.
Score: 3
bobrox
5:53 PM on 26/06/2015
Forgive me for being so naive, but, I thought Aust Post was a public service not a profit driven private company. Yes,Yes, I know that I have some strange ideas.
Score: 0
libbym
5:45 PM on 26/06/2015
I work for an online business. We send many parcels per day, using three or four different companies including Australia Post. Australia Post has the least security so AP parcels go missing most, are reported as supposedly delivered then magically get 'stolen', AP deliveries include many breakages [we wrap / label parcels very well] that other companies seem to avoid and unless parcels go to major city centres on within a state, the AP cost is outrageous compared to other private company postage methods.
Additional 'secure delivery' measures should not be required in order to get mail securely delivered when postage costs are already very high. An AP post parcel of up to 500gms is $7.45 at base rate. Up to 500gms is very light and most parcels weigh far more, so the average parcel via AP goes for around $11-18. Add that cost onto the price of goods and it pushes the cost of purchases too high, so sales drop. Registered mail adds a too-high % to the cost of our postage for customers to bear, but Australia Post almost makes it a certainty that if the parcel is not registered, then it is bound to disappear.
When parcels do go missing it is almost impossible to get the insurance money that AP promises. Their drivers seem careless. All up we use AP as little as possible. It is not a good look for our national postal service that should be our national pride and joy. No wonder so many other companies run similar services. AP quality is too easy to beat. Is is disappointing.
Additional 'secure delivery' measures should not be required in order to get mail securely delivered when postage costs are already very high. An AP post parcel of up to 500gms is $7.45 at base rate. Up to 500gms is very light and most parcels weigh far more, so the average parcel via AP goes for around $11-18. Add that cost onto the price of goods and it pushes the cost of purchases too high, so sales drop. Registered mail adds a too-high % to the cost of our postage for customers to bear, but Australia Post almost makes it a certainty that if the parcel is not registered, then it is bound to disappear.
When parcels do go missing it is almost impossible to get the insurance money that AP promises. Their drivers seem careless. All up we use AP as little as possible. It is not a good look for our national postal service that should be our national pride and joy. No wonder so many other companies run similar services. AP quality is too easy to beat. Is is disappointing.
Score: 0
fedup1953
5:32 PM on 26/06/2015
What astounds me is that Mr Fahour continually goes on about the loss of the standard letter mail business but what has he done to encourage any uptake of it - NONE that I have seen.
When was the last time you saw Australia Post advertising for Mothers Days cards, Birthday Cards or Christmas Cards and the like. No it is all parcels and the new Digital Mailbox. Post thanks to Mr Fahours direction is digging this hole all by itself. It is promoting the Digital side of things but at the same time it is totally disassociating itself from its previous bread and butter business.
Come one Media - start digging into the Post story - what's it all about? Post committed millions to modernising the mail network in the 90's to be able to move the letters in a more economical manner which it did.
To now just forget that and concentrating ONLY on digital and parcels is madness. They should be trying by all means to push the digital services but at the same time promote the proven letter business and invent different markets for the letter product. They don't have to throw the baby out with the bath water.
We need someone who isn't fixated on Annual Bonus Payments but instead focused on having a strong Australia Post that can pay a dividend each year to the Australia People again. How come Mr Fahour gets paid great bonuses each year if the business is failing? Doesn't add up does it?
Phil - Western Australia
When was the last time you saw Australia Post advertising for Mothers Days cards, Birthday Cards or Christmas Cards and the like. No it is all parcels and the new Digital Mailbox. Post thanks to Mr Fahours direction is digging this hole all by itself. It is promoting the Digital side of things but at the same time it is totally disassociating itself from its previous bread and butter business.
Come one Media - start digging into the Post story - what's it all about? Post committed millions to modernising the mail network in the 90's to be able to move the letters in a more economical manner which it did.
To now just forget that and concentrating ONLY on digital and parcels is madness. They should be trying by all means to push the digital services but at the same time promote the proven letter business and invent different markets for the letter product. They don't have to throw the baby out with the bath water.
We need someone who isn't fixated on Annual Bonus Payments but instead focused on having a strong Australia Post that can pay a dividend each year to the Australia People again. How come Mr Fahour gets paid great bonuses each year if the business is failing? Doesn't add up does it?
Phil - Western Australia
Score: 0
fedup1953
5:31 PM on 26/06/2015
What astounds me is that Mr Fahour continually goes on about the loss of the standard letter mail business but what has he done to encourage any uptake of it - NONE that I have seen.
When was the last time you saw Australia Post advertising for Mothers Days cards, Birthday Cards or Christmas Cards and the like. No it is all parcels and the new Digital Mailbox. Post thanks to Mr Fahours direction is digging this hole all by itself. It is promoting the Digital side of things but at the same time it is totally disassociating itself from its previous bread and butter business.
Come one Media - start digging into the Post story - what's it all about? Post committed millions to modernising the mail network in the 90's to be able to move the letters in a more economical manner which it did.
To now just forget that and concentrating ONLY on digital and parcels is madness. They should be trying by all means to push the digital services but at the same time promote the proven letter business and invent different markets for the letter product. They don't have to throw the baby out with the bath water.
We need someone who isn't fixated on Annual Bonus Payments but instead focused on having a strong Australia Post that can pay a dividend each year to the Australia People again. How come Mr Fahour gets paid great bonuses each year if the business is failing? Doesn't add up does it?
Phil - Western Australia
When was the last time you saw Australia Post advertising for Mothers Days cards, Birthday Cards or Christmas Cards and the like. No it is all parcels and the new Digital Mailbox. Post thanks to Mr Fahours direction is digging this hole all by itself. It is promoting the Digital side of things but at the same time it is totally disassociating itself from its previous bread and butter business.
Come one Media - start digging into the Post story - what's it all about? Post committed millions to modernising the mail network in the 90's to be able to move the letters in a more economical manner which it did.
To now just forget that and concentrating ONLY on digital and parcels is madness. They should be trying by all means to push the digital services but at the same time promote the proven letter business and invent different markets for the letter product. They don't have to throw the baby out with the bath water.
We need someone who isn't fixated on Annual Bonus Payments but instead focused on having a strong Australia Post that can pay a dividend each year to the Australia People again. How come Mr Fahour gets paid great bonuses each year if the business is failing? Doesn't add up does it?
Phil - Western Australia
Score: 1
hanson
4:53 PM on 26/06/2015
Staff cut only after Mr has the decency to set an example and take a large pay cut himself.
would he have the testicular fortitude to do so is another matter, rarely would you see the OIC set an example
would he have the testicular fortitude to do so is another matter, rarely would you see the OIC set an example
Score: 2
netter
4:41 PM on 26/06/2015
I don't understand how Australia Post is losing so much. As letter mail decreases, parcel mail increases due to online shopping. Posting a parcel has become ridiculously expensive for the service it provides.
A few weeks ago I ordered two items on eBay, one from Scotland and one from a town 100kms away from the capital city where I live. They were posted on the same day. The one posted in Scotland arrived first and the postage was cheaper.
A few weeks ago I ordered two items on eBay, one from Scotland and one from a town 100kms away from the capital city where I live. They were posted on the same day. The one posted in Scotland arrived first and the postage was cheaper.
Score: 4
ken of the east
3:28 PM on 26/06/2015
Someone has to pay for Mr Fahour's salary and the wages of the team he has brought into the job with him. Well done, since 2009 when he took on the job after the NAB, he has achieved a fatter personal bank balance and is slowing killing off an Australian icon.
Score: 7
le blogeur gai
3:24 PM on 26/06/2015
In 2013 Ahmed Fahour was paid $4.80 million as head of Australia post.
He was paid more than the bosses of Woolworths, Woodside Petroleum, Village Roadshow, Seven, Fairfax, Tabcorp, Seek, Super Retail Group, David Jones and JB Hi-Fi – some of the biggest companies in Australia.
Compare his remuneration to the 2012 remuneration of:
The US Postmaster General US$384,229
The head of the UK Royal Mail 1.47 million pounds
Canada Post boss CA$497,100
Australia Post workers received a pay rise of 1.5% in 2013. Fahour, already one of Australia's highest-paid executives, received a pay increase of 66%.
(Google it - it's on the net!)
He was paid more than the bosses of Woolworths, Woodside Petroleum, Village Roadshow, Seven, Fairfax, Tabcorp, Seek, Super Retail Group, David Jones and JB Hi-Fi – some of the biggest companies in Australia.
Compare his remuneration to the 2012 remuneration of:
The US Postmaster General US$384,229
The head of the UK Royal Mail 1.47 million pounds
Canada Post boss CA$497,100
Australia Post workers received a pay rise of 1.5% in 2013. Fahour, already one of Australia's highest-paid executives, received a pay increase of 66%.
(Google it - it's on the net!)
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