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Royal Mail’s top brass has signalled potential further stamp price increases following a £120million National Insurance escalation as a result of the Budget.
Martin Seidenberg, the head honcho of the postal behemoth’s parent company, has not dismissed additional job cuts due to the rising expenses.
“We are looking at all areas of the business,” he said.
The threat of more costly stamps comes after dramatic hikes in recent years. The cost of a first-class stamp nowadays sits at a hefty £1.65, a prime leap from 60p back when Royal Mail was privatised just over ten years ago.
Mr Seidenberg, who leads International Distribution Services (IDS), remarked that measures from Rachel Reeves’ initial Budget last month will “hit us harder compared to our competitors”.
With approximately 130,000 UK employees, the company insists the surge in costs makes altering its universal service obligations – which mandate six-day-a-week first-class deliveries – “more urgent”, reports the Mirror.
On the topic of the £120 million blow and its possible ramifications, Mr Seidenberg said: “We are looking at a bunch of measures. It is too early to say but we will look at prices and cost efficiencies. I cannot rule out any price increases.”
Quizzed about potential redundancies, his response was “too early to say”, but he did not dispel the possibility.
Furthermore, Mr Seidenberg suggested greater automation could be on the cards for the business.
The executive also conceded that Royal Mail is likely to fall short of delivery targets for letters and Christmas cards over the three-month period encompassing Christmas.
However, he maintained that its performance during the festive season itself would surpass last year’s, following the recruitment of thousands of additional staff.
In September, Ofcom announced it was contemplating allowing Royal Mail to abandon Saturday deliveries for second-class letters as part of a consultation process. This news followed IDS improving its profitability over the previous six months and celebrating progress in its significant transformation plan.
The company has undergone a substantial restructuring, which resulted in the elimination of thousands of jobs from 2022 due to industrial action impacting Royal Mail. IDS is currently awaiting approval for its proposed £3.57 billion takeover by Czech billionaire Daniel Kretinsky.
It posted an adjusted operating profit of £61 million for the 26 weeks leading up to September 29, a significant improvement from a £169 million loss the previous year.
