Managing large-scale restructuring: Swedish Postal Services
Few industries have experienced such fundamental changes as the postal services since the 1990s. This case study examines the downsizing strategy of the Swedish Postal Services, Posten AB, which is an example of a long-term and ongoing restructuring process. It focuses on the development of the Futurum Programme in 2000, a separate outplacement service of Posten, which aims to facilitate a faster and smoother restructuring process. There are clear benefits to each participating employee and hence the negative effects associated with long dismissal notices are minimised.
The ongoing restructuring at the Swedish Postal Services, Posten AB, is one of the longest downsizing processes in Swedish business history. Over the last 15 years, Posten has nearly halved its total workforce from 72,000 to about 38,000 employees, and the restructuring continues.
Downsizing with the help of an outplacement programme
The major downsizing process is the result of fundamental changes and increased competition within the postal sector, both of which have necessitated cost awareness and large-scale streamlining measures. With the liberalisation of the postal services market, the Posten monopoly was abolished in 1993, after which it was converted into a for-profit state-owned company. Moreover, the market conditions changed considerably for delivering postal services and logistics, driven by factors such as deregulation, internationalisation, the introduction of new information and communication technologies, and changes in the demand for services.
Futurum Programme and its key objectives
A separate Futurum unit was established within Posten in 1999 and was assigned its own board of directors. The unit works in close cooperation with the Swedish Council of Redundancy Support (CRS) which is the largest outplacement organisation in Sweden. This council is unique in a European context, as the organisation is owned and established by both the private sector employer organisation, the Confederation of Swedish Enterprises (Svensk Næringsliv) and the white collar employee union, the Federation of Salaried Employees in Industry and Services (Privattjänstemannakartellen, PTK).
The key objectives of Futurum were to provide an outplacement solution that enables the company to adapt restructuring operations quickly, while also finding a socially sensitive solution, thus strengthening the reputation of Posten as a socially responsible company. The programme has two overall aims:
- all participants in Futurum must have a new job within 18 months, and 70% of the participants must have a new job after 10 months;
- the participants must have a positive impression of Posten as a responsible employer and believe that Futurum provides professional support.
Case study topics
The case study of Posten’s restructuring process covers the period between the mid 1900s and early 2005. It examines the following aspects:
- critical factors leading to the major downsizing process in the 1990s, such as the decline in the volume of letters, a reduced need for manual work, increased competition and decreased profit margins;
- the statutory framework of managing company downsizing in Sweden in the 1990s, focusing on the downsizing process at Posten;
- the establishment of the Futurum outplacement programme, its principles and key objectives;
- the success factors as outlined by the head and participants of the Futurum Programme, by trade union representatives, and research study results of Gothenburg University.
EMCC: Key messages
EMCC: Access Information
The case study is downloadable free of charge as a PDF file by clicking on the link below.
This case study highlights how an outplacement programme can be successfully implemented in the postal sector. It outlines how the concept can prove useful, not only as part of a long-term and ongoing restructuring process of a formerly state-owned company, but also as a more general tool in developing redundant employees’ competencies and thus their employability on the labour market. In particular, the voluntary nature of Futurum and the participants’ feeling of control have led to the success of the programme.