Royal Mail said it may need to cut up to 10,000 roles by next August, blaming strike action by its workers and the continuing decline of its core business.
In an unscheduled trading update a day after Royal Mail workers staged a 24-hour strike over pay and conditions, the company said thousands of roles would have to go because of damage and disruption caused by industrial action, as well as declining parcel volumes.
Royal Mail said it expects to make an annual operating loss of about £350m in the year to the end of March 2023. It said that could rise to £450m if customers turn to rivals because of the disruptions to its delivery services.
The company said that it needs to cut up to 6,000 full-time frontline roles in delivery and processing by March and seek an overall reduction of 10,000 full-time equivalent roles by next August. It employs a total of about 140,000 people.
“We will be starting the process of consulting on rightsizing the business in response to the impact of industrial action, delays in delivering agreed productivity improvements and lower parcel volumes,” the company said. “Wherever possible, we will look to achieve FTE rightsizing through reductions in overtime, temporary staff and natural attrition.”
Royal Mail said eight days of industrial action have taken place or been notified to the company by the Communications Workers Union (CWU), with a further 16 days of potential strike action planned for November and December.
“If these take place, the loss for the full year would increase materially and may necessitate further operational restructuring and headcount reduction,” the company said. “We will also continue to push for talks with CWU at Acas, which need to be time bound as the damage from further strikes will only necessitate further changes in the business, beyond those already announced.”