Royal Mail set to make up to 10,000 redundancies after mammoth financial losses

Royal Mail will consult on up to 6,000 redundancies as the delivery giant blames ongoing strike action for mammoth financial losses.

London-headquartered parent group International Distributions Services told investors on Friday the move is in response to the ‘impact of industrial action, delays in delivering agreed productivity improvements and lower parcel volumes’.

IDS is seeking short-term cost efficiencies through the planned reduction of 5,000 full-time equivalent roles by March and around 10,000 by August, it said.

Royal Mail will consult on up to 6,000 redundancies as the delivery giant blamed industrial action for mammoth financial losses

This is expected to require between 5,000 to 6,000 redundancies by August.

Royal Mail is expected to fall to a £350million operating loss for the year after being hit by industrial action.

GLS, its international distribution network, has been performing in line with expectations, the company added.  

Royal Mail shares dipped more than 13 per cent, trading at 181.25p in the run up to 9am Friday. 

The cuts announcement comes a day after Royal Mail workers in the Communication Workers Union (CWU) launched a fresh strike in a long-running dispute over pay and conditions.

The CWU, representing 115,000 Royal Mail postal workers, has held strikes in September and early October, and has threatened more strikes this month and next.   

Commenting on Royal Mail’s results CWU General Secretary Dave Ward told This is Money: ‘The announcement is the result of gross mismanagement and a failed business agenda of ending daily deliveries, a wholesale levelling-down of the terms, pay and conditions of postal workers, and turning Royal Mail into a gig economy style parcel courier.

‘What the company should be doing is abandoning its asset-stripping strategy and building the future based on utilising the competitive edge it already has in its deliveries to 32 million addresses across the country.

‘The CWU is calling for an urgent meeting with the Board and will put forward an alternative business plan at that meeting.

‘This announcement is holding postal workers to ransom for taking legal industrial action against a business approach that is not in the interests of workers, customers or the future of Royal Mail. This is no way to build a company.’

Royal Mail chief executive Simon Thompson added: ‘This is a very sad day. I regret that we are announcing these job losses.

‘We will do all we can to avoid compulsory redundancies and support everyone affected.

‘We have announced today losses of £219 million in the first half of the year. Each strike day weakens our financial situation.

‘The CWU’s decision to choose damaging strike action over resolution regrettably increases the risk of further headcount reductions.’

Royal Mail, the former British postal monopoly recently changed the name of its holding company to International Distributions Services from Royal Mail Plc. 

A further update on performance will be provided in Royal Mail’s half year results announcement on 17 November 2022. 

This post first appeared on Dailymail.co.uk