Royal Mail will consult on up to 6,000 redundancies, as the delivery giant blamed industrial action for mammoth financial losses.
The firm said the move is in response to the “impact of industrial action, delays in delivering agreed productivity improvements and lower parcel volumes”.
It said it 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.
This is expected to require between 5,000 and 6,000 redundancies by August.
Parent group International Distributions Services (IDS) said that Royal Mail is expected to fall to a £350m operating loss for the year, after being hit by industrial action.
The company, which employs around 140,000 people, said this could increase to a roughly £450m loss if customers move elsewhere following the initial strike action.
It came as IDS told shareholders that Royal Mail suffered a £219m operating loss over the first half of its financial year, tumbling from a £235m profit a year earlier.
Royal Mail said this included a roughly £70m hit from three days of strike action.
The 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.
Royal Mail chief executive Simon Thompson said: “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 £219m 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.”
CWU general secretary Dave Ward said: “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.”
Susannah Streeter, senior investment and markets analyst at Hargreaves Lansdown, commented that the predicted £350m losses equate to the figure Royal Mail had hoped to make in cost savings before the strikes erupted.
“Royal Mail had already been hit by waves of challenges, from a weakening of the pandemic parcel boom to fewer Covid test deliveries and a structural decline in letter sending.
“E-commerce deliveries have rebased to a higher level than pre-pandemic times, which has been a welcome trend, but the company has been side-swiped by the worse than expected cost-of-living crisis, as inflation has been exacerbated due to the invasion of Ukraine, sparking much deeper industrial strife.
“Rebranding under International Distributions Services in the summer was meant to help the group repeat the success of its GLS global delivery arm across the UK business, but with relations with unions at rock bottom, it’s been unable to capitalise on this bright spot in operations.“
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