Czech Post announces mass layoffs and closure of 300 branches

Česká pošta (ČP), the state postal carrier, will this year lay off thousands of employees and close hundreds of branches due to financial issues and fewer people using the company’s services. 

ČP Deputy CEO Miroslav Štěpán confirmed in an interview with Seznam Zprávy published this morning that 300 post office branches across the country would be shut this summer. Personnel will be made redundant from July of this year, which includes clerks working at counters, mail carriers, and delivery drivers.

The ČP head emphasized this morning that the branches that would close would be located in large cities. A ČP branch operating in a small village or town, therefore, is at no risk of closure.

According to Štěpán, 40 percent fewer people are using ČP’s letter and money services compared with 2019 levels.  

The recent spread of data boxes, enabling online, paperless communication with government authorities, is one reason for the reduced usage of ČP’s physical post offices. From this year it is also mandatory for self-employed people to use the boxes, negating the need to visit ČP buildings.

The declining usage of ČP’s services is reflected in the company’s financials. Last year, the state enterprise reported a loss of CZK 1.5 billion – ČP also posted a loss in the years running up to 2022. 

The postal firm’s recent and repeated price increases – such as increasing the cost of sending a registered letter by CZK 10, to CZK 62 – are reflective of both the company’s need to raise funds and its higher operating costs. Economist at Trinity Bank Lukáš Kovanda wrote in January that ČP’s prices are rising four times faster than the rate of inflation.

Štěpán said that the post office is unable to function from its own income alone and needs financial aid from the government and private entities. Last year, the company received CZK 6 billion from the state. He estimates that ČP requires over CZK 1 billion more.

Minister of the Interior Vít Rakušan, whose scope includes the operations of ČP, is currently liaising with the company on an action plan to pull it out of the ground. He says that transformative change is "essential," if it wants to continue normal functioning in 2024.

The state postal carrier faces difficult times ahead. As Štěpán said in the interview: “if all necessary steps are not implemented, all scenarios are at play – including insolvency.”