Deutsche Post Plans Management Cuts

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Germany's Deutsche Post AG will begin restructuring its letter-delivery service by reducing both management and sorting infrastructure by early next year.

The first step involves cutting the number of office managers from 83 to 49 by the start of 2002.

Insiders said Deutsche Post will save about 50 million euros by reorganizing its letter-delivery business.

In the first round of changes, the postal group mainly will consolidate management within its smaller sorting offices. The second step will see the organizational consolidation of these sorting offices.

Deutsche Post does not intend to close any of its 83 sorting offices as part of its latest restructuring, nor does it plan to cut the number of postal workers in these sorting offices or mail delivery staff.

Profits are rising for Deutsche Post, however. In late August, Deutsche Post said its net income fell 5 percent in the first half of its fiscal year but that its operating profit and sales rose.

The partially privatized post office said its net income was 1.05 billion euros ($960 million) in the first half, down from 1.1 billion euros a year ago. Klaus Zumwinkel, chairman of the company's board of management, said the drop resulted largely from scheduled tax charges.

Operating profit was up 5.5 percent at 1.41 billion euros ($1.29 billion), compared with 1.34 billion euros last year. The results were in line with analysts' expectations.

Deutsche Post's mail division accounted for the vast majority of operating profit, 1.15 billion euros ($1.05 billion).


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