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Saturday, 7 April 2012

Will 2012 indeed be the year of mass lay-offs in The Netherlands? According to sixteen large, Dutch municipalities and the PostNL post group, it might!

During the first year of my blog, I have written quite some articles on mass lay-offs. Articles like:

Also in my 2012 Outlook for The Netherlands, I warned that The Netherlands should reckon with more mass lay-offs in 2012:

Many companies, like the one that I work for, wrote red figures over the last three years since 2008. And although some companies still managed to make a decent profit during this period, I don’t expect the Dutch companies to maintain their excess personnel when the current recession proves to be a nasty one. The period of mass lay-offs that I noticed during this year has only just started, is my conviction.

Was I right with my forecast? According to some of the largest municipalities in The Netherlands and to the former TNT Post Group, now called PostNL, it might be a positive ‘yes’.

The Dutch newspaper NRC ( writes on the plans of sixteen large municipalities to lay-off more than 6000 civil servants in the coming years, in order to meet the draconic austerity measures of the Dutch government. Here are the pertinent snips:

In sixteen large, Dutch municipalities more than 6,100 jobs will vanish in the coming years. The municipalities have to substantially reduce spending, due to the deteriorating financial circumstances and cannot avoid laying off civil servants. They want to cut down €586.3 mln on their budgets.

The city council of Rotterdam, for instance, announced this week that it wants to scrap 2,450 jobs. Rotterdam wants to cut down €200 mln at the own organization.

There won’t be many compulsory redundancies, according to most municipalities. They expect that they can diminish the number of civil servants by using natural labor turnover: civil servants that are retiring in the coming years.

I’m not that optimistic. The Dutch government has to deploy an additional €12-€16 bln in austerity measures, in order to meet the demands for a maximum 3% budget deficit, that are set in the European Stability and Growth Pact (SGP). This amount comes on top of the €18 bln that the cabinet of PM Mark Rutte already wanted to cut down on the state budget. If the cabinet means business with reducing the numbers of civil servants in The Netherlands, this cannot come without mass lay-offs among the officials of local and central government.

At the other hand: also the cabinet of PM Rutte, just like many right-wing cabinets before it, is in an uneasy split between wanting less civil servants and demanding better service and more legislation, surveillance and repression from their civil workforce. You can’t have both at the same time and therefore in the end something has got to give. In the past, it have always been the plans to reduce the numbers of civil servants.

However, what makes this crisis different from previous crises is its persistence and the way it has been developing during the last five years. Besides that, the Rutte government has to deliver its 3% budget deficit in 2013 to the EU; the Dutch stance, concerning austerity measures for the PIIGS, had been very rigid and left no room for negotiation. The PIIGS and the other European countries will remember that, when push comes to shove. That might be bad news for the civil society in The Netherlands after all.

The former state company-turned-commercial PostNL (formerly known as TNT Post Group) is planning to lay-off thousands of official postmen, in favor of less trained and less well-paid post deliverers. The old postmen and women received a fixed salary with increments, wherein the contributions for social security, vacation money, health insurance and a pension were paid.

The new post deliverers receive a price per delivered postal item and are further on their own. If they can’t deliver the post for any reason (like sickness or holidays), it is not PostNL’s problem. Besides that, the combined fees for all delivered postal items are much lower than the fixed salary that the postmen received. The full-time postman will disappear and turn into a part-time job, that is hardly enough to earn a decent income. People that are dependent on this income will probably be forced to find another job, next to their post delivery job.

Here are some snips of an FD article that was published on this topic today:

From the beginning of 2012 until mid-2013, PostNL will deploy in stages the new delivery system, wherein the postman disappears and will be replaced by a post deliverer that only works part-time.

Part of the reorganisation is the close-down of 300 regional post delivery centers. In this process 2,800 employees will be fired.

I understand that the declining numbers of postal items are worrisome for the non-state-owned, commercial postal companies. Email, mobile computing and social media are the growth markets that will largely swallow up conventional post delivery. This declining market forms a strong contrast to package delivery, that is an absolute growth market with the soaring usage of online shopping.

PostNL is a commercial player in a diminishing domestic market and has fierce competition from Sandd and Selektmail in The Netherlands. Expansion abroad is still difficult, with the current government protection for their foreign competitors. That is why the intended personnel reductions of PostNL might be inevitable this year.

Unfortunately, the PostNL executive management lost all goodwill of their employees by handing out large bonuses and severance payments to themselves over 2011, while simultaneously presenting their plans to fire 2,800 employees. 

Sadly, this kind of tactlessness is still very common among executive management in The Netherlands, that already lost connection to their workers some years ago.

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