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Royal Mail says 6,000 jobs to go as strikes bite

Royal Mail parcel post box (pic: Royal Mail)
Royal Mail says it needs to cut costs

Royal Mail says it will have to cut 6,000 jobs by the end of August 2023 as it warned of losses resulting from industrial action and lower parcel volumes.

The company said it expects a full year adjusted operating loss of £350m.

Newly-branded parent company International Distributions Services said it is seeking short-term cost efficiencies through the planned reduction of 5,000 full-time equivalent roles by March and up to 10,000 by August. On current estimates it is expected to require between 5,000-6,000 redundancies.

Shares in the company fell 12% or 25.7p to 180.86p in early trade and are down 64% in the year to date. Analysts at City broker Peel Hunt said the operating loss forecast for the Royal Mail unit was worse than it had been predicting – and it was at the bearish end of consensus.

Postal workers are engaged in a long-running dispute over pay and conditions, with a series of 19 further walkouts planned for the coming weeks.

The Communication Workers Union (CWU) described the action as the largest strike in a year of industrial unrest across the economy.

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 £219 million 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: “Postal workers face the biggest ever assault on their jobs, terms and conditions in the history of Royal Mail.

“The public and businesses also face the end of daily deliveries and destruction of the special relationship that postal workers and the public have in every community in the UK.

“It is insulting the intelligence of every postal worker for Royal Mail chief executive Simon Thompson to claim that their change agenda is ‘modernisation’.

“It is nothing more than an asset stripping business plan that will see the break-up of the company and the end of Royal Mail as a major contributor to the UK economy.”

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