It is now just over a year since Donal Curtin took over the top job at An Post from John Hynes. Having worked at the ESB since the early 1970s, Mr Curtin knows a thing or two about pushing through restructuring programmes in the teeth of fierce trade union opposition.

But since succeeding John Hynes as chief executive on July 14th, Mr Curtin has found himself enmeshed in financial and industrial relations problems.

While he and his management team are known to work long hours trying to get agreement on the company's rescue plan, attempts to curb costs have been thwarted.

Mr Curtin delivered a solemn warning to an Oireachtas committee earlier this year that An Post was on a "financial knife-edge" and its future was at risk if staff numbers were not drastically reduced.

But by March, the company was not convulsed by a round of job cuts, but by a major postal dispute.

A total of 420 postal workers, members of the Communications Workers Union (CWU), were temporarily removed from the An Post payroll as a result of continuing industrial action by the union at the Dublin mail centre.

Severe disruption to deliveries occurred in large parts of the State, including Dublin. But the dispute was not even about the 1,450 redundancies the company is looking for.

It was about the far less contentious issue of staff operating a new sorting system.

Mr Curtin told reporters yesterday that the company was still seeking 1,450 redundancies. Talks on this and postal delivery generally are before the Labour Relations Commission.

Mr Curtin made it clear yesterday that the 270 jobs to go at SDS were in addition to the 1,450. So An Post is seeking 1,720 redundancies in total, all voluntary at this stage, of course. The omens for the company achieving these objectives are not good.

Staff numbers at An Post have been rising significantly in recent years, despite the company's crippling financial problems.

Five years ago, the company employed 9,140 staff, but by the end of last year this had grown to 10,498 and these figures do not include the large number of postmasters engaged by An Post on an agency basis.

Mr Curtin has managed to impose a recruitment freeze and the consequent natural wastage is expected to knock 300 people from the payroll by the end of this year, but Mr Curtin's desire to trim the whole workforce by 1,720 may yet be frustrated.

The general secretary of ICTU, Mr David Begg, has already written to the Minister for Communications, Mr Ahern, pointing out that partnership could be damaged by actions that do not have the consent of staff.

In a letter sent in early July, Mr Begg pointed out that certain principles in relation to change at semi-state companies were included in the Sustaining Progress agreement.

So far, the Minister has avoided getting drawn into argument over whether SDS should be shut or not, but he has emphasised that redundancies should be voluntary.

Mr Curtin said earlier this year that job-loss pain would be distributed throughout the organisation.

But attempts to reduce management numbers by 30 per cent have run into resistance from the Association of Higher Civil Servants and Public Servants (AHCPS). Mr Seán Ó Riordáin of the AHCPS has described the company's approach as "off the wall" and this issue is also before the Labour Relations Commission.

Whatever happens, An Post is facing major difficulties: its cash position has deteriorated sharply, its mail delivery volumes are under pressure from electronic substitutes such as email, and all the time it is carrying massive payroll costs. According to its 2003 annual report, payroll represents 67 per cent of its total operating costs.

Mr Curtin said yesterday the company was still on a "knife-edge", although trading had improved slightly.

The company has eased its position in the last few months by not paying rises scheduled under Sustaining Progress. But unions remain deeply unhappy about this and how the whole SDS issue has been handled.

The company's other hope for extra revenue generation comes via a price increase from ComReg, but the regulator has in the past proved unenthusiastic about giving An Post price rises until service improves. It is understood the company wants to see the price of a stamp rise from 48 cents to 55 cents.

The company revealed yesterday that SDS had lost €20 million in the last two years alone and €30 million over the last five years. This raises the question of why it has taken so long to draw a line under the disastrous losses at this division.

Mr Curtin yesterday defended himself on this point by saying that An Post had to assess four possible options before selecting the right one, which he said was closure.

The company is still predicting a break-even position by 2005 and modest profitability by 2006. But once again this hinges on the company cutting its payroll and other costs.

One of these is overtime. An Post pays out €30 million in overtime annually, half of it to staff in Dublin.

A key objective of An Post management is to curtail this in the years ahead.

But because of the failure of previous management teams to address the issue, overtime has become a de facto component of wages for many An Post staff.