New Zealand Post is to cut 120 mail processing roles as it halves its mail processing centres from six to three.

The state-owned postal service announced this morning it would expand its operations in Auckland, Manawatu and Christchurch but stop processing mail in Hamilton, Wellington and Dunedin.

The change will result in around 500 part time and full-time jobs being discontinued while 380 roles will be created at the expanded sites - resulting in a net loss of 120 roles.

New Zealand Post chief executive Brian Roche said streamlining its mail processing operations would significantly improve the efficiency of its processes.


Roche said the change is in response to the continuing decline in mail volumes and would save $20m to $30m "over time".

The number of pieces of mail being processed has fallen by nearly 200 million in the last decade. Mail volumes are currently declining at 8 per cent a year.

"We looked at all options and decided this plan will allow New Zealand Post to achieve savings on a meaningful scale while maintaining a high-quality service across New Zealand," Roche said.

Last week New Zealand Post said it would axe 80 to 100 corporate roles at its Wellington and Auckland offices by July in a move affecting roughly 6 per cent the company's 1340 corporate staff.

It said the restructuring would provide cost savings and also "right-size the firm", which has faced a sharp decline in mail volumes, to meet the current business conditions.

In January the state owned enterprise said it planned to reduce delivery days and replace some Postshops with self-service kiosks.

NZ Post:

* A state owned enterprise formed in 1987.

* Under the Postal Service Act 1998, which allowed competition in the letters market, a new "Deed of Understanding" required NZ Post to meet a series of social, stamp price, and service obligations.

* Under that deed NZ Post must provide five or six-day delivery to 99.88 per cent of delivery points or postal addresses.

* It also has to maintain at least 880 postal outlets and post centres.

* While letter volumes have fallen sharply in recent years, the number of delivery points has increased, squeezing profits.

* The letters business is now barely breaking even and is forecast to produce a $25 million loss by 2018.