The Post Office and its 220 employees could face a shake-up in a bid to make the service more efficient.

Last year the Post Office failed to make a profit due to growing costs and a decline in revenue, with more than 90 percent of the service's $9.6 million expenditure swallowed up in wages.

The organisation also saw its revenue drop by two percent to just short of $9 million, caused partly by a decline in stamp sales.

Finance Minister Grant Gibbons last night told MPs that new technology could shortly be introduced to further automate the process of sorting mail.

Speaking on the Budget debate in the House of Assembly, Dr. Gibbons said that although the Post Office was developing a long term strategy in order to get back in the black, it was facing increasing competition from the private sector.

"The Post Office will be going forward under increasing competitive pressure,'' the Minister said.

"Another thing under investigation is the use of an automatic sorting machine. There is a French company that is working on developing a smaller machine for smaller jurisdictions.

"Larger machines have only been suitable for larger jurisdictions that deal with thousands of millions of letters a year rather than just millions.

"With improved technology and miniaturisation this is something we can do going forward.'' Dr. Gibbons also suggested the organisation could make more cash by offering different services.

"It could well be that the Post Office could provide a broader source of services for the public in the future,'' he said.

"There are a number of presentations being made to improve over the counter transactions and broaden the number of services, for example the licensing of cars and simple registrations.

"There are basically a number of initiatives coming out of the five year plan to improve customer services and put it on a more competitive basis.'' Shadow Finance Minister Eugene Cox said: "This is a very important department of the Government and one that, in most cases, provides jobs for Bermudians.

"But it's not boding well for the Post Office because the private sector is using private facilities. It's disappointing when we see that most of the costs -- 90.38 percent -- goes on labour.''