Royal Mail has threatened to make up to 6,000 workers redundant by as part of a plan to cut 10,000 jobs by the end of next August as it warned of financial losses due to industrial action and lower parcel volumes.
Members of the Communication Workers Union on Friday started a 24-hour walkout in a long-running dispute over pay. It has threatened up to 19 days of strike action in the buildup to the busy Christmas period.
Parent company International Distributions Services said it had made a loss of £219m for the first half of this financial year, compared with a £235m profit last year, with around £70m attributed to “direct negative impacts” from three days of industrial action. Shares in the company slumped almost 14%.
Royal Mail warned that if the CWU followed up with its threat, annual losses “would increase materially and may necessitate further operational restructuring and headcount reduction”.
It said that under current plans 10,000 jobs in total could go, including up to 6,000 redundancies. For the current fiscal year, it forecast an adjusted operating loss of around £350m, including the “direct, immediate impact of eight days of industrial action which have taken place or been notified”.
“This may increase to around a £450m loss if customers move volume away for longer periods following the initial disruption,” it added.
“The position of Royal Mail has deteriorated due to a combination of the impact of the industrial dispute, an inability to deliver the joint productivity improvements agreed with CWU under the Pathway to Change agreement, and ongoing macro-economic headwinds,” the company said.
“Although action was taken in H1 to lower labour costs, the business was unable to reduce costs quickly enough in line with deteriorating parcel volumes.”
CWU general secretary, Dave Ward, said his members “face the biggest ever assault on their jobs, terms and conditions in the history of Royal Mail”.
“The public and businesses also face the end of daily deliveries and destruction of the special relationship that postal workers and the public have in every community in the UK.”
