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

A Royal Mail Group postman on his delivery tour in Manchester, UK

Paul Thomas | Bloomberg | Getty Images

royal mail revealed plans on Friday to cut up to 6,000 jobs by next summer after a summer of strikes by postal workers in the UK

“We will begin the consultation process on resizing the business in response to the impact of industrial action, delays in delivering agreed productivity improvements and lower parcel volumes,” the parent group of Royal Mail, recently renamed International distribution servicessaid in a statement.

“Based on current estimates, around 5,000 to 6,000 layoffs could be needed by the end of August 2023.”

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

CNBC reported last week that leaders of the The CWU (Communication Workers’ Union) was in talks with Royal Mail bossesincluding CEO Simon Thompson, as the company seeks to avoid another 16 days of union-threatened industrial action.

Royal Mail said its financial situation had deteriorated due to a “combination of the impact of the labor dispute, an inability to deliver the joint productivity improvements agreed with the CWU under the deal Pathway to Change and Ongoing Macroeconomic Headwinds”.

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

In a statement on Friday, the CWU said Royal Mail’s financial problems were the result of “gross mismanagement and a failed business scheme of ending daily deliveries, wholesale leveling of terms, wages and conditions for postal workers and to transform Royal Mail into an economy-style courier on demand.”

CWU General Secretary Dave Ward has urged the company to review its business plan and use its “competitive advantage” to deliver to 32 million addresses across the UK.

“This ad demands a ransom from postal workers for taking 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 business,” Ward said.

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