Lietuvos Paštas (Lithuanian Post) is planning to raise its service prices and lay off about 600 employees after reporting a net loss of 6.4 million euros last year, the state-owned company said.
The reason for its financial difficulties is a decline in conventional postal services, it said on Thursday.
“As customers are increasingly choosing alternative delivery methods and deliveries at post offices are decreasing, we have decided to reduce the number of employees,” Lietuvos Paštas CEO Asta Sungailienė said in a press release.
The company plans to lay off around 600 of its 3,700 employees, with around 800,000 euros to be spent on their severance payments.
“Until recently, conventional postal services, that is, those provided in post offices or by postal carriers, generated the largest part of the company’s revenue,” according to Sungailienė. “The revenue shrank by more than a third in the second half of 2021 and continues to shrink this year.”
According to her, the decline was mostly due to the scrapping of a VAT exemption for parcels from non-EU countries. The flow of such deliveries fell 64 percent in the second half of 2021.
Meanwhile, non-conventional postal services grew in year-on-year terms, with deliveries to parcel lockers up by 67 percent and international mail brokerage services up 126 percent.
Lietuvos Paštas posted a net loss of 6.4 million euros last year, versus a profit of 1.6 million euros in 2020, as revenue edged down by 0.8 percent to over 111 million euros.
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