To address the ongoing losses since 2022, Brazil's postal service announced a restructuring plan on Monday (29th), which includes closing 16% of its branches, approximately 1,000 out of the country's 6,000 self-managed branches.

As per Zhongjin's understanding, Brazil's postal service expects to save 2.1 billion reais by closing these branches. Across the country, Brazil's postal service has a total of 10,000 service points, including those provided through partnerships. Emmanoel Rondon, the President of Brazil's postal service, emphasized that the branch closures would ensure compliance with universal postal service principles while balancing financial performance and service compliance.

The plan also involves reducing expenses by approximately 5 billion reais by 2028 and laying off 15,000 employees through property sales and two voluntary retirement plans by 2027. Brazil's postal service has been facing continuous losses since 2022, with a structural deficit of 4 billion reais annually. This restructuring plan aims to address this issue.

Furthermore, Brazil's postal service has signed an agreement to secure a 12 billion reais bank loan to enhance the company's cash flow. However, management is still working to raise an additional 8 billion reais to achieve a balanced budget by 2026. The company is also considering restructuring its corporate structure starting in 2027 and evaluating the possibility of going public.

The President emphasized that this plan is not only for financial recovery but also reaffirms the importance of the postal service as a strategic asset for Brazil, crucial for integrating the national territory, ensuring equal access to logistics services, and ensuring operational efficiency. Since 2016, the postal service has been facing financial crises primarily due to market transformations brought about by digital communication and the entry of new competitors.

The President noted that while the postal industry globally faces dynamic market changes, some companies have successfully adapted, while others continue to incur losses. For instance, the United States Postal Service (USPS) is also facing similar challenges.