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Royal Mail to make up to 10,000 redundancies as bosses attribute huge financial losses to industrial action
- It said it is aiming for short-term cost savings through the planned reduction of 5,000 full-time equivalents by March and about 10,000 by August.
- This is expected to require between 5,000 and 6,000 layoffs in August
- Royal Mail expected to fall to £350m operating loss for the year
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Royal Mail will consult on up to 6,000 layoffs as the delivery giant blames the ongoing strike action for massive financial losses.
Its parent group International Distributions Services, headquartered in London, told investors on Friday the move comes in response to the “impact of industrial action, delays in delivering agreed productivity improvements and lower parcel volumes.”
IDS is targeting short-term cost savings through its planned reduction of 5,000 full-time equivalents by March and about 10,000 by August, it said.
Royal Mail will discuss up to 6,000 layoffs as the delivery giant blames industrial action for massive financial losses
This is expected to require between 5,000 and 6,000 layoffs in August.
Royal Mail is expected to fall to an operating loss of £350m for the year after being hit by industrial action.
GLS, its international distribution network, performed in line with expectations, the company added.
Royal Mail Shares fell more than 13 percent and traded at 181.25 pence leading up to 9 a.m. Friday.
The announcement of the cuts comes a day after Royal Mail employees in the Communication Workers Union (CWU) launched another strike over a long-running dispute over pay and conditions.
The CWU, which represents 115,000 Royal Mail postal workers, went on strike in September and early October and has threatened further strikes this month and next.
Commenting on the Royal Mail results, CWU Secretary General Dave Ward told This is Money: “The announcement is the result of gross mismanagement and a failed business agenda to end daily deliveries, a large-scale leveling of terms, postal workers’ wages and conditions, and make Royal Mail a gig economy-style parcel courier.
What the company should do is abandon its asset disposal strategy and build for the future based on the competitive advantage it already has from its deliveries to 32 million addresses nationwide.
‘The CWU calls for an urgent consultation with the Board and will present an alternative business plan during that meeting.
“This announcement keeps postmen asking for ransom for taking legal industrial action against a business approach that is not in the best interest of employees, customers or the future of Royal Mail. This is no way to build a business.”
Simon Thompson, CEO of Royal Mail, added: ‘This is a very sad day. I regret that we are announcing this job loss.
“We will do everything we can to avoid redundancies and to support everyone involved.
“We have today announced a loss of £219 million in the first half of the year. Every day of strike weakens our financial situation.
“Unfortunately, the CWU’s decision to favor harmful strike action over resolution increases the risk of further staff cuts.”
Royal Mail, the former British postal monopoly, recently changed the name of its holding company to International Distributions Services of Royal Mail Plc.
Further performance update will be given in Royal Mail’s half-year results announcement on 17 November 2022.