Pos Malaysia looking to cut workforce

By ALIFAH ZAINUDDIN / Pic By MUHD AMIN NAHARUL

POS Malaysia Bhd is looking to cut down on its operational expenses by shrinking the size of its workforce.

The national postal service provider allocates 52% of the group’s annual revenue on average to manage employee costs, limiting its ability to generate better profit despite posting higher revenue.

Group CEO Datuk Mohd Shukrie Mohd Salleh admitted that having 24,000 people under the group is “a lot to manage” and said the company is currently in talks with union leaders on compensation terms.

“We have a very good union at Pos Malaysia and in principle, they have agreed that any further discussion on collective agreement would be performance-based,” Mohd Shukrie told reporters at the company’s AGM in Shah Alam yesterday.

He said the company’s current compensation structure is based on a fixed sum, which typically results in lower net profit when the company goes for collective agreement negotiations.

“In principle now, all the union leaders understand the need to restructure the way we compensate our staff to be more performance-based, which can vary according to the performance of the business instead of being fixed in nature,” he added.

Pos Malaysia’s revenue has been steadily increasing over the last few years from RM1.3 billion for the financial year 2013 (FY13) to RM2.1 billion in FY17.

However, revenue per employee has also grown over the same period from RM78,100 per employee in FY13 to RM89,200 per employee in FY17.

Mohd Shukrie said the company is looking to maximise its earnings of projected higher returns from its logistics and aviation segment this year to expand its business at the regional level.

“Expansion plans are ongoing. We are in talks with a few parties but as we progress, we will need more partners, especially now that we are moving beyond Malaysian shores,” he said.

However, Mohd Shukrie said Pos Malaysia’s plan into overseas market will not involve physical presence into the intended countries as operations will be overseen from Malaysia.

He said the company is trying to move to the next stage, which is to capture international businesses from within Malaysia.

“The risk is not as great as if we were to move physically abroad. That will be harder because we will have to operate in a different ecosystem,” Mohd Shukrie said.

“We’d rather invest a lot more money to set up a base in Malaysia, but the time will come when we might have to physically cross the border in doing our business there,” Mohd Shukrie said.

Earlier in April, Mohd Shukrie told The Malaysian Reserve the company is seeking collaboration with postal companies in Asean with an announcement of at least one such partnerships anticipated at the end of this year. The company shifted its focus to Asean as plans to acquire a Middle-Eastern courier firm were dropped.