State-owned postal service Omniva is to lay off 75 staff in Estonia, citing a fall in parcel volumes and a rise in costs relating to the lengthening of supply chains, among other factors.
Omniva says the difficult external environment, particularly with regard to economic contraction, intensified price competition in the logistics sector, and the ongoing war in Ukraine significantly affected its core business and economic results last year.
Omniva announced on its website that: "In order to guarantee better results this year and going forward, the company needs to cut costs, and so also reduce staff numbers. To that end, a collective layoff process has been initiated."
Omniva board chair Mart Mägi says that the second half of 2023 in particular proved extremely tough for logistics companies in general, while an economically and geo-politically complex environment contributed to a fall in parcel and package volumes, and a lengthening of the supply chain.
This in turn increased the costs of the state delivery firm, he added.
"Regardless of the external factors, Omniva must continue to be a competitive and efficient company, so we have to reduce our costs by at least €2.5 million."
Mägi went on to say that although Omniva's pan-Baltic operating model introduced this year brings greater efficiency, as does the automation of many work processes, further savings must also be sought elsewhere.
"Since operations in Estonia constitute a substantial proportion of the group's result, and while the greatest decline has been seen in the universal postal service and with periodicals delivery, the layoffs primarily affect Estonian positions," Mägi said.
Mägi added that cutting the workforce was seen as the final option for Omniva, while before making this decision, a thorough analysis had been carried out in the company to identify all possible savings points.
"Sadly, these points of savings proved insufficient, so it is with a heavy heart that we have had to reduce the number of staff," Mägi continued.
"The layoffs involve not only Estonian employees, but during the preceding months already, positions at Omniva's Latvian and Lithuanian branches have been reviewed, too, and we are making changes across all divisions."
The collective layoff concerns people working in various positions and departments, while several currently unfilled positions will also remain so.
The changes will mostly be put in place during the first four months of the year.
On this, Mägi said that: "We are cooperating with the Estonian trade unions and the Unemployment Insurance Fund, while our HR department is providing support to all departing employees, with regard to finding a new workplace."
Editor: Andrew Whyte