Britain’s postal operator Royal Mail on Friday unveiled plans to cut up to 10,000 jobs, blaming the move in part on ongoing staff strikes that contributed to a first-half loss.
The announcement came a day after workers staged the first of 19 strikes aimed at the critical run-up to Christmas, joining several other sectors in taking industrial action as sky-high inflation erodes the value of wages.
Royal Mail’s job cuts follow “the impact of labor disputes, delays in delivering agreed productivity improvements and lower parcel volumes,” the parent company said in a earnings statement, sending shares lower.
“Our full-time operational workforce will need to be reduced by an estimated 10,000 by the end of August 2023,” added International Distributions Services alongside news that had fallen into the red.
The planned job cuts will affect almost seven percent of Royal Mail’s 150,000 employees.
The restructuring includes up to 6,000 redundancies.
The group suffered an operating loss of £219m ($245m) in the six months to the end of September, it added on Friday.
This was in sharp contrast to a £235million profit the year before, when it was buoyed by strong package demand during the pandemic.
“It now expects full-year losses of £350m, which is the number it was hoping for in cost savings before the strikes broke,” noted Susannah Streeter, senior investment and markets analyst at Hargreaves Lansdown.
The threat of further strikes beyond Christmas “means that no certainty can be given on the full year prospects for the entire group,” she added.
Royal Mail said full-year operating losses could rise to £450m if “customers postpone volumes for extended periods due to strikes”.
International Distributions Services’ share price fell more than 13 percent to 182 pence in London trading after the update.
– Royal makeover –
Founded more than 500 years ago, Royal Mail has seen some of its most turbulent times over the past decade, particularly following its controversial privatization in 2013.
The company’s core business of letters has been devastated as consumers increasingly go online to communicate.
However, it has enjoyed booming demand for parcel deliveries during the UK’s Covid lockdowns – and has played a crucial role in supplying test kits and protective clothing in the pandemic.
But the parcel boom of the Covid era has died down.
Following the death of Queen Elizabeth II last month, all new Royal Mail mailboxes will no longer contain the royal EIIR cipher.
The cipher stood for Elizabeth II Regina (“queen” in Latin).
Instead, they are printed with CIIIR, representing Charles III Rex (“king” in Latin). There is a crown above both letters.
New UK stamps will also feature an image of his head.
