Israel Post Announces Emergency Economic Measures

Postal service says ending morning collection, firing five executives and 130 temp workers will save 53 million shekels a year.

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The Israel Post has announced immediate emergency measures to cut costs as the first step in its recovery program. Management said the moves, which include the immediate dismissal of 130 temporary workers, will save 53 million shekels ($15.2 million) a year.

In addition to the dismissals, the postal service is also eliminating one of two daily collections of mail from outdoor (red) collection boxes. At present mail is picked up at 10 A.M. and at 4 P.M. The agency said the move will have little effect on customers, since in any event the mail is usually sorted only in the evening, for the next day’s delivery. Employee overtime hours are also to be reduced 50%, a move that is expected to face opposition from workers.

Israel Post CEO Haim Almoznino on Wednesday informed the head of the postal workers’ union that he was implementing the plan immediately. The agency’s board of directors approved the recovery plan a few weeks ago.

Management says it will continue to negotiate with the union as it goes ahead with the cost-cutting measures.

In the longer term, Israel Post plans to lay off dozens of senior managers who were hired on individual contracts and are not covered by the union’s collective bargaining agreement. Five of these executives, including members of the management committee, have already been summoned to pre-dismissal hearings.

The postal service says the emergency plan is critical to stopping the deterioration of the company’s finances and preserving its cash holdings.

The new measures come on top of several steps that have been taking since the beginning of the year to hold back costs. These include a hiring freeze as well as cuts to the operating and investment budgets that the company says will save 60 million shekels a year.

The Israel Post’s long-term recovery plan is much broader. It includes firing some 2,000 employees, as well as cutting home delivery to twice a week, closing a number of post office branches and cutting hours at others.

A post office, with collection boxes in front. Demand for postal services has plunged 40% in recent years. Credit: Alon Ron

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