Last Mile Brief 10/03/2023: Magyar Posta makes 1,200 layoffs and implies sanctions are to blame

Signs of financial struggles at the state-owned Hungarian Post have been obvious for months, if not years, but one of the most worrisome red flags was the announcement of the closure of hundreds of post offices back in the autumn of 2022.

At that time, the organisation referred to the energy crisis as the reason for it downsizing, saying that the increased costs had resulted in approx HUF 20 billion extra costs (which is approximately 52 million euros). The newly appointed management of the Hungarian Post decided to close down 364 post offices from the middle of November and lay off 300 employees at the same time.

Back then, the closures were said to be temporary, and would only be for the winter months to save money on energy bills. With the help of local councils, 45 post offices in 32 towns were to be reopened in the spring.

However, the Hungarian Post has now announced that there it has no means to reopen the rest of the suspended branches. Besides the energy crisis, the war in Ukraine was named as a reason for the decision.

Moreover, the company has come to the decision to let go of 1,200 employees.

In an announcement sent to the Hungarian News Agency, the company explained that the main task of the new management had been to increase the efficiency of the organization, and to establish business processes and service standards that meet the requirements of the 21st century.

“However, the protracted sanctions-hit energy crisis in Europe is creating an increasingly difficult economic environment, which, like domestic and large foreign companies, is increasingly affecting the activities of the Hungarian Post,” the announcement reads.

The organisation started a partnership programme last summer, under which private companies can take over the operation of the post offices in some small towns with less than 2,000 residents.

Now, in its announcement about the pay-offs, the post added that this postal partner program may provide an opportunity for the laid-off employees to continue their work via the contracted partners.

The Hungarian Post also emphasised in its announcement that the scale of the decision was made by the management in a way that the company can still maintain the stability of its operations “even in the economic situation affected by the current sanctions”.