Portugal’s Post Office’s announcement that it is to shed staff, in a cost-cutting exercise to prop up its share price, has had some success with shares rising slowly on the Lisbon stock exchange.
After reaching a historical low of just above €3, CTT’s management had to do something - and quickly – to impress shareholders already nursing huge paper losses.
CTT, led by Francisco Lacerda, is to cut up to 300 staff as part of the general restructuring plan although why this re-announcement had an effect on the share price, is unknown.
CTT formally stated that, "after some requests for early retirement, management told the workers’ representatives that they can accept up to 300 terminations by mutual agreement and early retirement in two distinct stages."
Analysts remain suspicious of the restructuring plan as there are some regulatory hurdles to cross which may delay things.
If CTT’s idea of cost cutting is to let 300 staff go, out of a total of over 10,000 workers, it is a wonder the shares recovered at all.
CTT management needs to reduce the number of post offices it runs but the regulator wants to keep the current number operating. CTT already has looked at allowing some sites to be managed by third parties so as to reduce overheads.
All of this is just rearranging the deckchairs as the shares have dropped 40% since the third quarter accounts were posted. These were dire and contained news of a fall of more than 50% in profits.
Portugal's banks seem to be doing better on cost reduction measures as staff have been taking full advantage of the often generous leaving packages on offer.
More than 1,300 workers have left Portugal's five biggest banks so far in 2017 with another 500 expected to leave before Christmas.
Novo Banco has said 'so-long' to 400 staff members, Santander Totta has held leaving parties for 269 people, BCP hardly noticed 52 leaving, BPI has seen 347 employees opt for pastures new and Caixa Geral de Depósitos bank has paid off a further 298 employees with our money.
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