Royal Mail warns of 6,000 job cuts as postal workers step up strikes

London
CNN Business
 — 

UK postal service Royal Mail

(ROYMY) said Friday that it could cut 6,000 jobs as it warned of a big loss this year, which it blamed on a wave of strikes and a decline in its parcel delivery business.

About 110,000 Royal Mail staff went on strike on Thursday to demand better pay and working conditions. It was the first of 19 days of strikes planned to coincide with the peak holiday shopping season, including Black Friday and Cyber Monday.

The strikes follow walkouts in August and September. Parts of Royal Mail’s service will be out of action for several days at a time as different teams walk out.

Royal Mail said it expected to report an operating loss of between £350 million and £450 million ($506 million) this year, taking into account eight days of strikes already taken or formally notified to the company.

A further 16 days of strikes could take place in 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 in a statement.

The Communication Workers Union, representing the postal workers, says the walkouts are part of the “biggest ongoing strike of the year.”

The CWU says it is fighting Royal Mail’s plans to change terms and conditions, including the introduction of new performance standards and an increase in hours for new staff. The union also says the company had imposed a 2% pay increase on workers, well below the rate of inflation. It is pushing for more, though it has not said by how much.

In a statement posted to its website on Friday, the union said it was demanding a government inquiry into the “gross mismanagement” of Royal Mail.

Royal Mail has said that most letters will not be delivered on strike days, and customers should expect delays to parcel deliveries. It would deliver as many tracked parcels and those tagged for fast-track delivery as possible on strike days, the company added.

The strikes are the latest in a wave of industrial action in the United Kingdom this year. Rail staff, bus drivers and lawyers are among the groups of workers who have walked out to demand higher pay as soaring inflation savages living standards. Amazon

(AMZN) workers are being balloted on strike action, with the result of the vote expected next week.

UK consumer prices shot up 9.9% in August from the year before, hovering around 40-year high inflation of 10.1% recorded the previous month.

And the squeeze is only getting worse. Prime Minister Liz Truss’ plans to push through billions worth of unfunded tax cuts sent the value of the pound plunging and the yields on government bonds soaring.

That’s already pushing up mortgage payments as lenders price in more aggressive rate hikes by the Bank of England to tackle the inflationary impact of the tax cuts and weaker pound.