Consignia says facing financial crisis; 'drastic' action needed
Consignia, formerly known as the Post Office, said it is facing a financial crisis and will need to cut its cost base by 15 pct or 1.2 bln stg by March 2003, according to an internal memo.
The document, leaked to the Communication Workers Union, admits Consignia is moving into a loss again for only the second time in 18 years and unless “drastic action” is taken the group “will fail as a business not just this year but in following years”.
“The levels of inefficiency in the business, despite our best efforts to control them, are crippling us. We are living beyond our means and we need to get a grip of this now,” the memo states.
Consignia estimates it will need to cut 10 pct of managerial and administrative jobs in the next 18 months, although specific numbers are mentioned. Some compulsory redundancies will be involved.
The union estimates the job cuts could total some 15,000.
The company will scrap some of its major projects and a decision on the future of its parcels business will be made “within the next couple of months”, according to the memo.
CWU general secretary John Keggie said the Department of Trade and Industry and the government “must ask just how a business that was in profitability for 20 years before commercial freedom was granted is now in such a financial mess”.
“The measures being proposed by the Consignia board can only be described as a ‘slash and burn’ policy,” Keggie said.
“Any attempts to outsource parts of the industry to private hands or to introduce compulsory redundancy will be vigorously opposed.”
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