Further job losses as part of ongoing restructuring at Czech Post

Czech Post intended to close 179 of its branches throughout the Czech Republic and lay off another 2,500 employees in October 2008 as part of an ongoing restructuring process. The reason for this move is the management’s desire to streamline the company’s operations, centralise its activities and become more competitive in preparation for the company’s privatisation in 2009.

Privatisation of company

In 2009, Czech Post (Česká pošta, s.p.) will change from a state-owned enterprise to a joint-stock company. As part of this transformation, the company wants to launch new services, both in terms of electronic communications and logistics. It also aims to increase competitiveness and prepare for the complete liberalisation of the postal services market – up to now, Czech Post has had a legally enshrined monopoly for letters and consignments of up to 50 grammes in weight (CZ0704019Q). The date for the complete liberalisation of postal services is unknown, but despite this Czech Post’s courier services are already facing serious competition.

Restructuring process continues

Czech Post began reorganising its operations as far back as 2006, when it made 1,000 employees redundant. In 2007, it laid off another 400 employees out of a total workforce of about 37,000 people. This year, the company planned to lay off a further 2,500 employees on 1 October 2008. Most of the employees to be made redundant include administrative workers in the company’s technical and financial divisions. In addition, some postal delivery workers will have their working hours reduced. The redundancies will also concern employees at post offices that Czech Post intends to close. The company plans to shut 179 of the 3,378 branches that are currently operating, most of which are in southern Bohemia, which makes up the western part of the country. The layoffs will have practically no impact on workers who deal directly with customers, such as counter clerks, apart from those at the branches due to be closed down.

According to the Director General of Czech Post, Karel Kratina: ‘This is a management decision, but I believe there will be a willingness to come to an agreement.’ Ms Kratina argues:

If we should pay our employees better wages, then optimisation is essential. This year, we raised the average salary by 14.5% and it is necessary to continue this trend. We can’t have the people whom we need leaving us. It is better to part with people who are not indispensable to the post office.

Trade union reaction

Trade unions have understandably disagreed with the layoffs. In a joint declaration on 18 August 2008, the trade unions operating in Czech Post pointed out that the redundancies will lead to:

a marked increase in workload and a deterioration in the quality of the work performed along with concomitant sanctions being imposed for shoddiness. The reduction of working hours will bring about a decrease in real earnings. This will result in a decline in the quality of the services provided and ultimately put unbearable pressure on employees.

The organisations involved included the company coordination committee of the Trade Union of Workers in Postal, Telecommunication and Newspaper Services (Odborový svaz zaměstnanců poštovních, telekomunikačních a novinových služeb, OSZPTNS), the Independent Union of Czech Post Workers (Nezávislé odborové sdružení pracovníků České pošty) and the principal organisation of the Transport Workers Union (Odborový svaz dopravy, OSD) (CZ0712019Q). Although the trade unions discussed the situation with the company management, they originally considered these negotiations to have been inadequate and had considered taking alternative measures such as strike action. Now, however, the parties involved have come to an agreement: post office employees who take over the work of colleagues who have been made redundant should get a pay rise. A more definite agreement between Czech Post’s management and the unions was expected to be concluded in mid September 2008.

Company approach

Czech Post will provide an assistance service to all employees directly affected by the reorganisation of jobs in the company. The company’s Human Resources (HR) Manager, Ivan Feninec, stated:

I believe it is a completely standard approach to offer support and help to employees who have been let go while they are looking for a new occupation. As a matter of course, we shall be closely cooperating with the labour authorities in individual regions, where each employee will be given contact details for possible employers. Czech Post has also prepared a detailed handbook of practical advice, which will help them get their bearings in their new situation in life.

This latest restructuring measure by Czech Post has also been reported by Eurofound’s European Restructuring Monitor (ERM) – see Czech Post [factsheet 11395](/search/node/emcc OR erm OR static OR factsheet OR 11395?oldIndex).

Soňa Veverková, Research Institute for Labour and Social Affairs (RILSA)