50,000 mail jobs 'set to be axed'

UP to 50,000 postal workers could lose their jobs in the biggest cuts in the history of the Royal Mail.

Almost a third of staff in the letters division could be hit, under plans to modernise the ailing business.

The cuts would be on top of 35,000 jobs which have gone through redundancies over the past five years.

This news comes as talks continue between union leaders and management over demands for a 27 per cent pay rise for working a shorter week. Royal Mail claim it would cost about GBP1billion, money it says it has not got.

An announcement is due next week.

There are reports that up to 30 per cent of full-time staff in the letters division could lose their jobs. With 160,000 people employed on Royal Mail letters, that would mean 48,000 cuts.

We are testing automation and new ways of working.

Royal Mail dismissed the reports last night, describing them as “speculation”. But they come at a worrying time for the postal giant, which has been forced to make major changes. Opening up the postal market to full competition, at the beginning of the year, has brought a sudden influx of foreign operators.

The new entrants have targeted the business customers who make up the vast majority of Royal Mail’s profits. Money made from bulk mail is used to subsidise the loss-making letters division.

Royal Mail announced an 86 per cent collapse in half-year profits in February, down from GBP159million to GBP22million.

The company loses £4million a week on its creaking network of post offices: for every stamped letter, it loses about 6p. Bosses say they have been forced to announce emergency plans to close the final-salary pension scheme to new entrants.

The Government has now stepped in to prop up Royal Mail finances, with a five-year, GBP1.7billion restructuring programme.

The potential job losses would come as a result of installing new machinery in sorting offices, to reduce costs.

A Royal Mail spokesman said: “It is an increasingly competitive market. We are testing new ways of working and that does include automation, but until we do that, we can’t confirm what impact it will have.”

“We will deal with automation as part of the business changes which are inevitable and something we will engage in,” said Dave Ward, deputy general secretary of the Communication Workers Union.

The union is demanding improved pay and conditions for postal workers.

Staff are paid a minimum GBP311 a week but the union wants GBP395. It also wants a 35-hour week, instead of 40 hours.