The Government plans to keep its struggling New Zealand Post despite its postal business shrinking and the company becoming more a logistics business, Finance Minister Bill English says.
It was revealed on Tuesday the state-owned enterprise expects to know by the end of July whether around 500 jobs will be axed.
The affected jobs are in management and specialist positions as well as support roles in the company's offices in Auckland, Wellington and Christchurch.
Declining annual revenue to the tune of $20 million to $30m coupled with plummeting letter volumes were the main driver behind the job cuts, according to a spokeswoman.
Mr English told reporters on Tuesday the job cuts were not a new announcement but part of NZ Post's long-term plan. In late 2013 it indicated it wanted to shed between 1500 and 2000 jobs. Then it had 10,635 people working the equivalent of 8761 full-time jobs.
"People aren't using the post anymore, except for the flag referendum," Mr English said.
NZ Post was working out how to be more of a logistics company but despite selling down its interest in power companies in the last few years, the Government wanted to keep it, he said.
"We are going to be keeping it so they are going to have to find a solution."
Mr English wouldn't comment if the Government was considering a law change to separate the struggling postal operations and the profitable KiwiBank business.
"There's already a degree of separation going on now," he said.
NZ Post recently announced a hike in the price of posting a letter, after last year reducing the number of mail delivery days each week in the main centres.
In 2015, postal volumes fell 9.1 percent. Stripping out the gain from asset sales, earnings fell 14 percent to $74m on an 8.8 percent drop in revenue to $766m.
Labour leader Andrew Little acknowledges postal volumes are dropping.
He urged the government to help those workers who would lose their jobs.
"The changes at NZ Post have been known about for years. Instead of being bystanders, National should be working with the SOE, unions and businesses to ensure a decent work transition for employees instead of leaving them on the scrapheap."