An Post seeks to close 200 post offices in radical restructuring plan
'We need to act now, not 2020' - says CEO
An Post is expected to seek the closure of more than 200 post offices and the co-location of many more to convenience stores in a radical restructuring plan being formulated for the ailing postal network.
Decisions will be made as early as summer as An Post management battles crippling losses.
More than half of all the post offices in the State are losing money.
Last week the company announced that it needed to increase the price of stamps to avoid a cash squeeze in the near future, and buy time for a fundamental restructuring of the company.
Sources have now told the Sunday Independent that a plan to close just 80 post offices, as proposed in a report by businessman and Dragons' Den investor Bobby Kerr, would be a short-term measure and would not address the underlying problems facing hundreds of loss-making post offices.
It is also understood that a €58m sum suggested by Kerr to help fund post offices for the next four years, is unlikely to be forthcoming from Government.
However, while Government would be reluctant to prop up the ailing post office network until 2020 with a €58m cash injection, a decision to close a large number of post offices around the country, especially in rural Ireland, would be met with political opposition from all sides.
At the moment there are close to 1,150 post offices, with Ireland having a particularly high ratio of post offices per head of population.
In a letter to postmasters from An Post this weekend, chief executive David McRedmond said that there was no point in delaying the restructuring of the network.
"The approach the An Post team and I are taking differs from the (Kerr) report in two fundamental respects," he said.
"Firstly, the report is predicated on a temporary and uncertain subsidy from Government. Secondly, the time-scale envisaged in the report is to stabilise the network for the next four years after which the problems would be even greater than they are today.
"We cannot and I do not want to delay the necessary fundamental restructuring decisions until 2020.
"Rather, we can complete the work now to ensure that we have a sustainable future for the business, certainty for postmasters, and continue to provide a high-quality service to our customers."
The letter to postmasters makes it clear that change must happen sooner rather than later.
Mr McRedmond acknowledges the extensive media coverage regarding the forthcoming postage price increase and the financial challenges facing An Post, including the post office network business.
He writes: "While we have stabilised the short-term cash-flow, the financial crisis in the company requires immediate action. I am very aware of the financial challenges facing our businesses. I am conscious that, while some postmasters/postmistresses are doing well, many more of you are concerned about the future of the business.
''Demographic shifts, new technology and a complex marketplace have all placed huge pressures on the Post Office Network."
Mr McRedmond states bluntly that he is intent on facing up to these challenges now.
He describes the Post Office Network Strategy Report (Bobby Kerr report) as a "useful top-line review", but adds that there is no substitute or alternative to doing the detailed granular work to address the business needs.
"I appreciate that these are challenging and troubling times for all involved in the business. An Post has no wish to prolong this uncertainty. I expect our review to be completed in a matter of weeks, following which we will engage with all stakeholders including you, Government, the IPU and major customers. I expect the necessary major decisions to be made before the summer," he told postmasters and postmistresses.