Australia Post will spend up to $190 million on staff redundancies as it attempts to stem the bleeding from its declining mail business.

The company is grappling with an expected $500 million full-year loss thanks to the mail business, which has lost $1.5 billion in the past five years.

It has set aside $190 million to cover voluntary redundancy payments over the next three years, with 1900 jobs reportedly set to go as the government owned business restructures its operations.

Chief executive Ahmed Fahour said the overhaul was necessary for Australia Post to survive.

“We have reached the tipping point that we have been warning about where, without reform, the business becomes unsustainable,” he said.

But he said there will be no forced redundancies as the company retrains and redeploys workers.

“I have made a commitment that there will be no forced redundancy of staff impacted directly by changes in our mail service and who are actively seeking jobs in other parts of the business,” he said.

“The provision will provide a safety net for employees who we know will choose not to transition with us and who may be legally entitled to a voluntary redundancy.”

He said most of the losses will be in metropolitan areas.

The expected full-year loss, the first in more than 30 years for Australia Post, comes after a 10 per cent slide in mail deliveries in the past year.

Communications Minister Malcolm Turnbull in March approved Australia Post’s reform plans, which include a two-tier mail delivery service and a rise in basic stamp prices to $1.

Fahour said Australia Post was looking to shift jobs from mail delivery to growing areas of its operations, such as parcels as it looks for a way back to profitability.

“Our ambition is to continue to grow jobs in areas such as parcel delivery and trusted services for consumers and small business, both in-store and online,” he said.

“The changes we are making are essential so we can continue to invest in our business, particularly in these growth areas.”

Unions say the plans will hit regional areas the hardest.

Changes allowing Australia Post to process mail at a slower pace are before federal parliament, and the union says they will open up job cuts outside the city.

“That would allow all of those mail processing jobs in regional areas to be shifted to metro areas,” Communication Workers Union assistant national secretary Martin O’Nea said today.

About 4400 Australia Post staff have been shifted into new roles since October 2013.