Royal Mail has revealed plans to cut around 700 management jobs to try to cut costs in the latest blow to Britain’s postal service.
The company will make the sweeping redundancies as part of a restructuring to try to save £40m a year.
But the reorganization is expected to cost around £70m, meaning the company’s profits will plummet from £500m to £430m.
Bosses said they will start negotiations with the unions over the proposed cuts, which are necessary to “streamline operations” and “enhance focus on local performance.”
It comes after a disastrous few weeks for Royal Mail amidst staff absences due to Covid and an outstanding £1m fine for the delivery chaos.
The company said services were affected as 15,000 employees were out of work in early January due to the spread of Omicron.
Meanwhile, the company is facing a huge fine due to delivery problems that caused hundreds of thousands of families to experience weeks of delays.
The company will make the redundancies as part of a major restructuring to try to save £40m a year (file photo)
Following today’s announcement, Royal Mail shares rallied before stabilizing later in the morning.
But the five-day turnaround for Royal Mail PLC shows how its shares have fallen in recent days.
Over the past month, amid delivery chaos the company blames on Omicron, shares have plunged.
The past six months during the pandemic have been chaotic for the company, with orders soaring but services strained.
However, stocks over the past year show the company is back in the green after rallying over the summer.
Sorting and deliveries face delays at TEN Royal Mail offices today
- Barking (IG11)
- Camberwell (SE5)
- Havant (PO9 y PO10)
- Herne Hill (SE24)
- Hornsey (N8)
- Lake Today (CH47 and CH48)
- Kesh (BT93)
- South West Manchester (M15, M16 and M32)
- Oeste de Norwood (SE27)
- Willesden (NW10 y NW26)
CEO Simon Thompson said: ‘Today we are launching a formal consultation on a management shake-up to further streamline our operations while enhancing the focus on local performance.
‘We are committed to conducting the process sensitively, working closely with our people and their representatives.
‘We have a history of driving change through natural turnover, redeployment and voluntary redundancy wherever possible.’
He said: ‘With Omicron’s rise, absence has been around double pre-Covid levels, with around 15,000 employees sick or isolated in early January. Fortunately, this is now improving.
“We are resolutely focused on addressing these issues that have affected our service in some parts of the country.
“To date we have spent over £340m on overtime, additional temporary staff and sick pay, as well as providing targeted support for the worst affected offices.”
Chairman Keith Williams added: ‘The last few months have shown that the challenge for Royal Mail is to improve both quality and efficiency.
“Looking ahead, the delivery of our transformation and modernization plans remains incredibly important in light of the accelerated change we are seeing and ongoing inflationary pressures.”
Bosses said they are ready to start negotiations with unions over proposed losses (file photo)
Postmasters look red after a series of POST BOX heists sparking fears thieves are stealing the iconic receptacles to sell at auction
Historic mailboxes are disappearing in rural areas, raising fears that thieves are stealing them for collectors.
Nine Royal Mail mailboxes have been missing from Suffolk and Norfolk villages since January 7.
The first was at Rickinghall, Suffolk, and then another eight were taken over a period of ten days.
Detectives say thieves are targeting old-style post boxes, which often sell at auction for thousands of pounds.
Suffolk Police Sergeant Brian Calver said: “We know these are quite valuable and attractive for their antique/collectible resale value, but…they could also be looking at their scrap value.”
Norfolk Police said their stolen boxes have the Royal Cypher ‘GR’, indicating they were installed during the reign of King George V or George VI.
A Royal Mail spokesman said it was “working hard to replace the missing boxes”.
Sergeant Calver added: ‘Such thefts are a great loss of heritage and identity for the people from which they are stolen.
“There is also the personal disruption that such a theft could cause to people who have sent important letters and documents and are sadly lost as a result.
Royal Mail was one of the big winners from the coronavirus crisis, with a huge increase in online purchases and deliveries.
But it revealed that last year’s high spikes eased over the Christmas period as more stores opened.
Led to drops of 4.9% in parcel revenue and 7% in volumes in the last three months of 2021.
However, this was still well above pre-pandemic levels, at 43.9% revenue and 33% volume.
Bosses said they had run into problems in recent months due to staff absences caused by people isolating with Covid.
The number of free employees peaked at 15,000 over Christmas and the beginning of the month, accounting for about 12 percent of its workforce.
This figure has fallen below 10 percent in recent weeks.
Meanwhile, the company faces a fine of more than £1m for delivery chaos that has seen hundreds of thousands of families suffer weeks of delays.
Today’s sorting and deliveries are interrupted at 10 offices across the country.
These include many areas of London, as well as the local counties, Manchester and Northern Ireland.
Some have been experiencing delays since before Christmas with clients complaining about medical results, appointment letters and even lost moving documents.
Royal Mail blames staff absences caused by the Omicron virus strain. There are also suggestions for Covid samples and the results are being prioritized.
The company has to deliver 93 percent of first-class mail within one business day of pickup, and 98.5 percent of second-class mail within three business days.
These rules do not apply in December and have been removed due to the coronavirus pandemic.
Royal Mail was fined £1.5m for missing targets in 2018 and appears to be on course for further penalties.
Regulator Ofcom said: “We know how important a reliable postal service is to customers, and we can take action if Royal Mail fails to meet our annual targets.” We have made it clear to the company that it must improve.’
A petition to Royal Mail from residents of London’s SE22 postal district said: ‘For years East Dulwich, Dulwich Village and parts of Peckham Rye have suffered from a faulty postal service.
‘This has caused a lot of suffering with lost prescriptions, lost documentation, lost bank details, fraud and stress. We just want to get our mail on time.
Royal Mail said it was providing “targeted support” to local offices and apologized to customers.