Itella is restructuring its organization to become more customer-oriented

ITELLA CORPORATION, STOCK EXCHANGE RELEASE, AUGUST 28 2014, AT 13:00 EET

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| Source: Itella Oyj
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Itella will restructure its organization in Finland to improve its customer focus and financial competitiveness. As part of the renewal, the company is launching a two-year performance improvement program and commencing cooperation negotiations concerning expert and supervisory positions in administration as well as planning and supervisory duties in production.

The organizational restructuring follows measures announced earlier this year by Itella to adjust its operations to respond to heavily declining mail volumes and the difficult market situation in logistics. 

- The rapid increase of digital communications and the economic recession have had a dramatic impact on the postal and logistics industry. This has forced us to make difficult structural decisions in order to ensure postal services to Finnish citizens and maintain the company’s profitability. By restructuring our organization to make it clearer and more customer-focused, we will respond to our customers’ expectations, reduce administrative costs and respond to the increasing international competition in the Finnish market, explains Heikki Malinen, President and CEO of Itella.

New business groups: Postal Services, Parcel and Logistics Services

To support its strategy, Itella is restructuring its organization as follows:

  • Letter, publication and marketing services will constitute a new business group named Postal Services. The business group will be headed by Senior Vice President Jani Jolkkonen, M.Sc. (Tech.), who was previously in charge of Itella Logistics.
  • Parcel, transport and warehouse logistics will constitute a new business group named Parcel and Logistics Services. The business group will be headed by Senior Vice President Jukka Rosenberg, M.Sc. (Econ.), who was previously in charge of Itella Mail Communications.
  • The production operations of sorting, transporting and delivery services in Finland will be combined into a new Operations unit. Combining the production operations of Mail Communications with the domestic transport operations of Logistics allows the company to leverage internal synergies, thereby improving quality and cost-effectiveness. The unit will be headed by Vice President Yrjö Eskola, M.Sc. (Tech.).
  • Jolkkonen, Rosenberg and Eskola will report to President and CEO Heikki Malinen.
  • The new organizational structure will take effect on January 1, 2015.

The organizational changes do not apply to the eCommerce unit established by Itella last year, which will continue to provide and develop e-commerce solutions. The changes also do not apply to OpusCapita and Itella Russia, which will both continue as separate business groups as before.

Itella is seeking profitable growth in parcel and logistics services. In line with its strategy, OpusCapita will focus on outsourcing and automation services for financial management processes, with the objective of profitable organic and acquisitive growth in the Nordic countries and Germany. In Russia, the company has a long-term goal of profitable growth in warehouse logistics and delivery operations.

- In Scandinavia and the Baltic countries, the first priority is improving profitability. We will develop our logistics services and seek growth in these markets from parcel and freight services as well as logistics solutions for e-commerce, Malinen says.

Seeking growth through renewal

According to Malinen, Itella’s renewal is largely directed by changes in customer behavior. For instance, the growing popularity of e-commerce means that customers expect Posti’s network of service points to provide a wide range of alternatives for sending and receiving parcels, as well as longer opening hours.

- The growth of e-commerce, the increasing re-evaluation of supply chains brought about by the transformation of the retail industry and the growing demand for local logistics services will provide many new positive growth opportunities for Itella. With new operating model we are building the new Posti as a modern service provider. We will increase the number of service points further and bring them closer to consumers and entrepreneurs. We will also invest in digital services, Malinen adds.

Itella Corporation will change its company name to Posti Group Corporation as of January 1, 2015.

Itella to commence cooperation negotiations in Finland

As a result of organizational restructuring, Itella will commence cooperation negotiations in Finland on September 2, 2014. The negotiations will apply to the Itella Corporation, Itella Posti Oy, Itella Logistics Oy and Itella Real Estate Oy organizations in Finland, and they will concern a total of 2,234 employees.

The need for changes primarily concerns employees in expert and supervisory positions in administration as well as planning and supervisory duties in production. According to preliminary estimates, the reduction need is at most 319 employees. The reduction need does not concern Posti’s service points or production duties, such as postal workers employed in mail sorting or delivery duties, drivers or the employees of service warehouses and address services.

As a responsible employer, Itella is actively involved in supporting its personnel in the current changing situation in the postal industry. Itella offers dismissed employees a change security package, which includes a monetary lump-sum in compensation and proportional to the duration of the employment relationship, pension solutions, and the statutory procedures related to change security.

Itella has also launched the Uusi polku (New path) support program for its personnel. The program will last several years and offers training and support for job seeking, retraining, or becoming an entrepreneur.

A new performance improvement program for 2015–2016

In spring 2013, Itella launched a two-year EUR 100 million performance improvement program. Its targets have been achieved in full ahead of schedule, in the third quarter of 2014. Itella will launch a new performance improvement program for 2015–2016. The program aims to accumulate cost savings in the amount of EUR 75 million.

 

Further information:

Heikki Malinen, CEO
Sanna Ahonen, Senior Vice President, Strategy and Development
Personnel-related matters: Jaana Jokinen, Senior Vice President, Human Resources
Itella MediaDesk, tel. +358 20 452 3366