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Royal Mail have petitioned the UK Government to cut letter services down to five days a week after admitting heavy losses following crippling industrial action. Three days of crippling strikes in the first half of the year are reported to have cost the organisation around £70 million.
Further strikes in October are believed to have cost Royal Mail about another £30 million. Bosses are now in ‘intensive’ talks with unions to avoid further strikes, but will be making around 6,000 redundancies and other drastic measures to make up for the shortfall.
The group has now formally asked the Government to reduce its current six-day letter delivery service to just five days, Monday through Friday only, under its Universal Service agreement. Royal Mail would still aim to keep its seven-day parcel delivery service.
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Boss Simon Thompson promised to do ‘whatever it takes’ to turn the the group around after half year results showed it was operating at a loss. Last month, it was revealed Royal Mail was considering 6,000 redundancies as part of plans to cut staff by around 10,000.
Short-term cost cutting measures include the planned reduction of 5,000 full time equivalent roles by March 2023, and around 10,000 by August. So far, Royal Mail has focused on removing overtime, leaving some roles empty, and reducing the number of temporary workers hired – but it has not revealed the how many roles have gone.
Mr Thompson, chief executive of Royal Mail, said: “We have always been clear we need change to survive. We have started turning the business around and will do whatever it takes.”
“We would prefer to reach agreement with the Communication Workers Union (CWU) but in any case we are moving ahead with changes to transform our business.”
A Government spokesman said there are ‘no current plans to change the universal service’. He added: “While we recognise the issues that Royal Mail raise, there would need to be a strong case that showed changes would meet reasonable needs of users of postal services and ensure the financial sustainability of the universal postal service.”
Late on Wednesday (17 November) Royal Mail said it had begun ‘extensive talks’ with the Communication Workers Union ahead of more strikes planned for 24 November. Royal Mail’s owner International Distributions Services (IDS), which was renamed from Royal Mail Group earlier this year and includes international delivery service GLS and Intragroup, reported pre-tax losses of £127 million for the first half, against profits of £315 million a year ago.
Keith Williams, non-executive chairman of IDS, said: “We have started to implement the change needed to right-size Royal Mail, which will ensure that it is both better placed to serve our customers’ needs in parcels, as well as letters, bring it back to profitability and provide a sustainable future.”
He added: “A sustainable future must also include urgent reform of the Universal Service. Government has now been approached to seek an early move to five day letter delivery, whilst we continue to improve parcel services. The board reiterates that in the event of the lack of significant operational change in Royal Mail it will look at all options to preserve value for the group including the possibility of separation of the two businesses.”
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