Hongkong Post to shift new hires from permanent appointments to two-year contracts amidst mounting losses

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Around 200 postal workers will be affected as the self-financing postal administration adjusts its staffing strategy.

Around 200 Hongkong Post (HKP) probationary employees will be offered two-year contracts on civil service terms instead of permanent appointments upon completing their probation, according to multiple local media reports.

Speaking on an RTHK radio programme on Tuesday (18 August), Postmaster General Leonia Tai said HKP must adopt a prudent approach to workforce planning and make timely adjustments and arrangements to ensure resources are properly used amidst declining mail volumes and a deteriorating financial outlook.

“We cannot offer permanent contracts to them,” Tai was quoted by the South China Morning Post as saying. Tai said, as a responsible employer, and after balancing all factors, HKP made the decision to offer two-year contracts on civil service terms. This will include around 30 staff who will complete their probation in September.

For employees whose probation periods end after September, contract renewals will be considered based on operational needs and service requirements at the time.

Tai stressed that employees will continue to be regarded as civil servants and retain their civil service benefits throughout the contract period. Staffing arrangements will be reviewed again once the organisation's future development direction becomes clearer.

Although HKP operates as a government department, it is required to be financially self-sustaining under the Post Office Trading Fund (POTF) model.

According to a Legislative Council document, HKP recorded a loss of HK$821mn in 2024-25, the largest deficit since the POTF was established in 1995. Between 2019-20 and 2024-25, mail volumes declined at an average annual rate of around 7%, representing a cumulative drop of 44%.

Answering a Legislative Council (LegCo) member’s question, Secretary for Commerce and Economic Development Algernon Yau said HKP is facing unprecedented operational challenges. While the organisation has been actively pursuing revenue-generating and cost-saving measures, it remains difficult for the POTF to achieve breakeven. As a result, the Government has submitted a proposal to the Finance Committee seeking HK$4.6bn in funding to support HKP’s operations over the next three years.

Beyond the staffing changes, HKP is implementing a range of revenue-enhancement and efficiency initiatives, including reviewing mail delivery pattern, rationalising its post office network, and applying technology to improve operational efficiency. The organisation also plans to expand its e-commerce mail business and use profitable services to subsidise the costs of providing universal postal services wherever possible.

All strategic options remain under consideration, including converting HKP into a government-funded service, establishing a joint venture with the private sector, or pursuing privatisation. The organisation is also exploring new opportunities in Belt and Road markets, Southeast Asia, and the Middle East as part of efforts to diversify revenue streams.

Photo / HRO