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Royal Mail has plunged to a first-half loss of more than £200m blaming the financial impact of ongoing strike action, a fall in the number of parcel deliveries and inability to restructure the business while at loggerheads with unions.
The postal service, which is in talks with the Communications Workers Union (CWU) to try to avert strikes in the run-up to Christmas, reported an adjusted operating loss of £219m in the six months to 25 September.
The embattled company, which last month warned it may need to cut up to 10,000 roles by next August, reported a profit of £235m in the same period last year.
Royal Mail reported a 10.5% fall in revenues year-on-year to £3.6bn, although this was flat compared with pre-pandemic levels.
“Due to management action, strike impact has been contained,” parent company International Distributions Services said on Thursday. “Talks with CWU continue although we are already moving ahead with required changes. Talks will cease if further industrial action goes ahead.”
Royal Mail expects to make a loss of £350m to £450m in its current financial year to the end of March, including the financial impact of up to 12 days of strikes that have been taken or that the company has been notified about by CWU.
“We would prefer to reach agreement with the CWU, but in any case we are moving ahead with changes to transform our business,” said Simon Thompson, chief executive of Royal Mail. “We have always been clear we need change to survive. We have started turning the business around and will do whatever it takes.”
The CWU, which represents more than 115,000 postal workers at Royal Mail, has said workers will next strike on the 24 and 25 of November, the bargain shopping day known as Black Friday, as well as on 30 November and 1 December.
However, talks scheduled to end earlier this week have now been extended in the hope of securing a deal for postal workers.
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“The talks, which had been scheduled to conclude on 15 November, are continuing to allow more time for a resolution to be reached,” a Royal Mail spokesperson said. “But time is tight given the notified strikes starting on 24 November.”
Royal Mail also said it has opened talks with the government about an early move to delivering letters only five days a week – ending Saturday deliveries – to cap costs as volumes decline and it shifts to focus better on parcel delivery.
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