New Zealand Post says it will reduce its work force by up to 2000 staff as part of a strategy to reshape the business over the next five years.
Chairman Michael Cullen announced the news at a press conference on a restructure that will result in street deliveries being cut back to three days a week in urban areas.
Cycle-based posties will be replaced by a walking and vehicle service in a change designed to "literally lighten the load" for staff who would increasingly be dealing with parcels.
Chief executive Brian Roche said most posties used bikes, and accepted the changes were likely to be unpopular.
Cullen said it was a sad day for posties.
"They are a Kiwi institution."
He could not give a precise figure on the number of job losses, or who they would be or where, partly because of the need to consult with staff and unions, he said.
Consultation began at midnight last night.
There would be no immediate effect, but 1500 to 2000 was the best estimate.
Losses would start next year and continue for the next three years, partly through natural attrition. The "largest proportion" of the job losses would come from frontline postal services.
''It should not be assumed that we're talking about up to 2000 people simply going down the road. We have natural attrition of something line a thousand [staff] a year. We don't know yet how many of the staff we don't need can be reincorporated in the business elsewhere.''
The EPMU said the changes were "cruel" and came with little warning.
"The scale of these cuts has come as a real shock to our members," EPMU postal industry organiser Joe Gallagher said.
"Yet again New Zealand Post and the Government have made a huge announcement out of the blue."
Prime Minister John Key says he understands the anxiety postal workers would feel. However, the losses would come over five years, meaning the impact would be more like 400 jobs a year, he said.
"The brutal reality is people are sending a lot fewer letters, and they are sending a lot more communications via text and email and electronic media in general," Key said this afternoon.
"So fundamentally it's a transitional change."
The changes being faced by New Zealand Post were the same as those in many countries, Key said.
An increasing number of Kiwis were employed in the IT sector, he said.
"I'm confident that NZ Post will manage this as best they can, give people as much warning as they can," he said.
Roche declined to discuss the cost of the changes but said "it makes commercial sense" to make them.
Cullen confirmed that New Zealand Post had held discussions with the New Zealand Superannuation Fund about investing directly in Kiwibank.
A float of the company, even a partial one, would probably damage the brand because it would not guarantee New Zealand ownership, he said.
Cullen said there had been a great deal of uncertainty about the future of New Zealand Post but said there was a future for mail for years to come.
"We simply don't know how many years to come," he said.
Fifty Kiwibank "growth stores" will be established and there would be a progressive move out of direct ownership of postal shops, although this would take place over some years.
Cullen said there was a change in the way services were being delivered, with less of a need for personal contact, although some people still wanted to deal with customer services staff face to face.
There would be a move to more stores "within a store" and agency arrangements, where Post Shops were owned privately under contract, such as within a supermarket or dairy. This meant longer opening hours and lower costs of ownership.
The changes were not a reflection on the work or efficiency of the current staff, but changes in technology, Cullen said.
"I want to make one thing very, very clear. This is not a reflection on the efficiency or dedication of our current staff in New Zealand Post. They have been highly efficient, are highly efficient, and highly productive. It is technological change and changing customer demands which are driving these announcements today."
He was aware of how changes to state-owned enterprises had been carried out with little regard to the impact on small communities, but this would not be repeated. The organisation would consult extensively with staff about how to retrain.
"We are not going to leave our people simply thrown out on the street".
New Zealand Post would begin to roll out fewer delivery days from mid-2015, although it would not immediately switch to three days a week. Where commercial imperatives allowed, it would maintain a higher service, including five-day delivery to post boxes, which are used by most businesses.
Where it went to a three day a week service, different areas would have deliveries on different days.
Labour Leader David Cunliffe said the numbers announced today was more than anyone was expecting.
''Workers and their families throughout New Zealand will be reeling. It's hard enough as it is to get a job in this market and unemployment is already too high. It will be very hard for these workers in a tough job market.''
Cunliffe said he understood the growth in email had put pressure on the letter business, but ''this massive workforce cut may not be the best response''.
His statement did not say what Labour would do to NZ Post if it was in government. "My message to workers who are set to lose their jobs is that Labour will stand with you.''
Communications Minister Amy Adams would not comment beyond a written statement saying it was ''obviously'' a difficult time for NZ Post workers, but with mail volumes falling, changes were inevitable.
Mail volumes were 24 per cent lower than in 2002 and continued to fall.
''New Zealand Post made it clear to me that significant structural changes to their business would have to be made regardless of any changes to the service level agreement with the Government.''
Last week the Government hastily announced its new deed of understanding, which will set out the minimum service requirements of New Zealand Post from mid-2015.
It confirmed long-signalled changes, including reducing postal deliveries to three days a week to most Kiwi households and replacing many post shops with self-service kiosks.
Roche confirmed at the time that the changes would inevitably lead to "hundreds" of job losses, but declined to give details.
New Zealand Post said in June that more rationalisation of its mail processing centres from six to three would result in 500 jobs cut and 380 positions created elsewhere.
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