Australia Post slashes costs

Virus pandemic has massive impact on revenue

SENIOR Australia Post managers including chief executive Christine Holgate will take 20 per cent pay cuts and forgo bonuses as the mail service cuts costs amid the coronavirus pandemic.

It comes as the pandemic causes a dramatic drop in demand for traditional Australia Post services such as letter deliveries and passport application processing.

Revenue from international post has also fallen as it becomes more difficult access to aircraft.

In an email to staff, Ms Holgate said there had been a boom in parcel deliveries as people stuck at home shopped online more.

Parcel delivery had already cemented itself as the organisation’s key growth service as the traditional letters business fades.

However, ther pick-up getting despite the furin demand for parcels, Australia Post was still under pressure and needed to cut costs, Ms Holgate told staff.

“I know many of you will also be aware of the boom in parcels our teams have been managing, as more people shop online as they work from home, self-isolate or sensibly avoid confined public spaces to protect themselves in the threat of the virus,’’ Ms Holgate told staff.

“Consequently,

I can appreciate for many of you this time may be confusing, and you may be wondering if parcels are growing so strongly, why are we immediately cutting back on expenses and managing our costs so tightly.”

While parcels was performing strongly, other parts of the business were feeling the effect the coronavirus was having on the economy, she said.

“In just the last week we have witnessed our letter volumes fall over 30 per cent, as has our international revenues and some of the other key services like passports, have halved.”

Ms Holgate said the large growth in parcels was not enough to cover the financial impact of the decline in the other areas of the business.

“With more potential restrictions imminent, as together we fight this virus, the risk these volumes fall further is very real,” she said. “Our strategy through this crisis is simple. Our first role must be to protect our people; their safety and for as many as possible their roles.

“Our second role is to serve our country, as many Australians depend on us to give them access to critical products and services through this crisis.

“Finally, we must safeguard our business, as we know this is our best defence to protect our people and the services we offer.”