An Post plans 1,350 layoffs after €46m losses

An Post lost over €46 million in 2003, despite predicting a €1 million profit, and now wants to lay off 1,350 staff.

Amid allegations of a cooking of the books, the company’s former chief executive John Hynes was accused yesterday of misrepresenting financial information to an Oireachtas watchdog committee.

An Post now has no cash and is operating from an overdraft for the first time. After it sold assets last year to pay wages it is now embarking on a recovery plan, which includes downgrading 50 post offices.

The plan is to minimise losses this year, break even in 2005 and return to profitability in the period from 2006 to 2008.

Despite the financial difficulties, performance bonuses in the region of €1m were paid to An Post executives in recent years, but have now stopped until the company is back on target.

At the Oireachtas Communications Committee Fianna Fáil TD Martin Brady severely criticised Mr Hynes for the information he provided to the committee a year ago, when he said the company would record a €1m profit for 2003.

“I believe the former CEO misrepresented the figures to the committee and mislead this committee,” the Dublin North-East TD said.

Indeed, chief executive Donal Curtin, who replaced Mr Hynes in the summer and subsequently discovered the true financial position, also conceded the financial information could have been better.

“I believe the company was not well served by the quantity and quality of management information,” he said.

Oireachtas Communications Committee chairman Noel O’Flynn said the management and unions now needed to sit down and finalise negotiations on the recovery plan, otherwise the company will be out of business in a few years.

Describing the financial situation as one of extreme difficulty, Mr Curtin said the company’s future was at risk. An Post plans to sell off parts of its operations and some properties and expects to let 1,350 staff go.

“The reality is that the company must solve its own problems by taking the actions that are necessary to achieve financial stability,” he said.

The company made an operating loss of €46.4m last year, and a bottom line loss of €29.5m after clawing back part of the deficit through property sales.

This year, the company is projecting an operating loss of €30.6m and a bottom line loss of €16.3m, as long as the recovery plan is implemented from mid-year.

The losses emanate from the letter post division at €36m and the SDS parcel service at €10m.

Mr Curtin also confirmed the proposal to bring in post boxes for houses in rural areas was still under consideration.