UK’s Royal Mail reveals plans to cut up to 6,000 jobs by next summer

UK’s Royal Mail reveals plans to cut up to 6,000 jobs by next summer

A Royal Mail Group postal worker on his delivery round in Manchester, U.K.

Paul Thomas | Bloomberg | Getty Images

Royal Mail revealed plans Friday to cut up to 6,000 jobs by next summer following a summer of strikes by postal workers in the U.K. 

“We will be starting the process of consulting on rightsizing the business in response to the impact of industrial action, delays in delivering agreed productivity improvements and lower parcel volumes,” Royal Mail’s parent group, recently renamed International Distributions Services, said in a release.

“Based on current estimates, c.5,000-6,000 redundancies may be required by end of August 2023.”

The group on Friday reported a half-year adjusted operating loss of £219 million ($247.2 million), citing around £70 million of direct negative impact from three days of postal worker strikes.

CNBC reported last week that leaders of the CWU (Communication Workers’ Union) were in talks with Royal Mail bosses, including CEO Simon Thompson, as the company looks to avert a further 16 days of industrial action threatened by the union.

Royal Mail said its financial position had deteriorated due to a “combination of the impact of the industrial dispute, an inability to deliver the joint productivity improvements agreed with the CWU under the Pathway to Change agreement, and ongoing macroeconomic headwinds.”

It now expects to make a full-year operating loss of around £350 million, including the “direct, immediate impact of eight days of industrial action which have taken place or been notified to Royal Mail.”

In a statement Friday, the CWU said Royal Mail’s financial problems were 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 courier.”

CWU General Secretary Dave Ward urged the company to overhaul its business plan and utilize its “competitive edge” in delivering to 32 million addresses across the U.K.

“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,” Ward said.

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