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Unions vow to fight Royal Mail cuts to 700 managerial roles

Royal Mail has unveiled plans to cut 700 managerial positions as part of a restructuring exercise that will deliver an annualized benefit of around £40m (US$54m), with around £30m (US$40m) coming in FY 2022-23.

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The company said that it was looking to streamline operational management to improve focus on performance at a local level.

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Simon Thompson, the Royal Mail CEO, said, “We have today entered into formal consultation on a management reorganization to further streamline our operations and, at the same time, improve focus on local performance. We are committed to conducting the process sensitively, working closely with our people and their representatives. We have a track record of delivering change through natural turnover, redeployment and voluntary redundancy, wherever possible.”

The announcement was included in the publication of Royal Mail’s third-quarter results, which demonstrated a softening in the parcel delivery landscape. For the period running from October to December 2021, domestic parcel volumes grew by 33% versus the same period in 2019-20, but declined by 7% year-on-year.

Keith Williams, chair, Royal Mail, said, “We expected some decline in parcel volumes given most retail stores were open during the period, unlike last year. However, the trend toward customers wanting more parcels remains, and responding to that change efficiently is key. Our domestic parcels business in the UK has seen demand increase by around a third over two years, as has our GLS business across its markets.

“The past few months have demonstrated that the challenge for Royal Mail is to improve both quality and efficiency. Looking forward, the delivery of our transformation and modernization plans remains incredibly important in light of the fast-paced change we are seeing and ongoing inflationary pressures,” he continued.

Thompson added, “With the rise of Omicron, absence has been around twice pre-Covid levels, with around 15,000 staff off sick or isolating in early January. Thankfully, this is now improving. We are resolutely focused on addressing these issues that have affected our service in some parts of the country. Year to date we have spent more than £340m (US$460m) on overtime, additional temporary staffing and sick pay, as well as providing targeted support for the offices most impacted. We have taken steps to maintain as comprehensive a service as possible, while keeping our people and customers safe.

“Higher absence has also been a headwind to delivering our productivity targets, but our Q3 performance gives us confidence in the delivery of adjusted operating profit for Royal Mail, before the cost of the reorganization announced today, in line with previous guidance at around £500m (US$676m).”

Royal Mail has said that the proposed changes in management structure are subject to statutory consultation with unions, and that it will also work with the Communication Workers Union (CWU).

Unite has said that it plans to fight the job cuts after a ‘£400m (US$540m) giveaway to key shareholders’. The union said its members were being made the scapegoat for the failure to maintain deliveries during the pandemic, which has led to the possibility of fines from the regulator, Ofcom. It also said that the restructuring announcement could affect up to 900 of its members in the delivery division, and that the threat of an industrial action ballot was now on the cards.

Sharon Graham, Unite general secretary, said, “Coming on top of a record turnaround in the company’s fortunes, which resulted in the board handing over a £400m (US$540m) giveaway to certain shareholders, this is cold comfort for those long months when postal employees were being badly hit by coronavirus at its worst.

“Unite will be giving maximum support to our members in fighting these unjust job cuts, and this includes the possibility of an industrial action ballot. Now is the time for the top executives to reconsider their proposals.”

Gary Sassoon-Hales, chair of the Unite CMA FTR committee, said, “We are appalled with the announcement today. The Royal Mail is running out of excuses when it comes to the rationale for management reviews. Our members can be forgiven for feeling that those working from home have been plotting to remove those who turn up and have ensured the future of this business during the pandemic.

“Unite CMA has not agreed with these proposals and will now enter into consultation. We will be feeding back the outcome of the consultation to our members, who will then decide on what action to take next.”

Mike Eatwell, Unite national lead officer for the CMA, said, “Unite managers were no more immune from the risks of the pandemic than anyone else, but that did not stop them helping on delivery rounds when postal operatives numbers were severely depleted. The current leadership team’s fixation on headlines to shore up the share price is behind this latest attack on our members’ job security and we need to respond accordingly.”

Royal Mail Group FY 2021-22 results will be published on May 19, 2022.


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