Crisis-hit Post Office to cut thousands of jobs
DAILY TELEGRAPH 4th October 2001
CRISIS-HIT POST OFFICE TO CUT THOUSANDS OF JOBS
By Rosie Murray-West Section: News
CONSIGNIA, formerly the Post Office, told workers yesterday that it was “facing a financial crisis” and announced a pounds 1.2 billion cost-cutting plan involving thousands of jobs. Union leaders described the day as Black Wednesday. Consignia’s announcement coincided with news that British Midland is to axe up to 600 jobs and the French telecoms group Alcatel is cutting more than 650 in London. In an internal memo, John Roberts, Consignia’s chief executive, warned workers that the company would fail unless it took drastic action. “The levels of inefficiency in our business, despite our best efforts to control them, are crippling us.” Announcing plans to cut costs by 15 per cent by March 2003, he said: “This probably means losing around one in 10 of our people in some areas.” Consignia employs 200,000. A spokesman stressed that not all cost-cutting would be achieved by job losses, but added: “Inevitably jobs will go. We are going to have to save pounds 2 million a day.” About 70 per cent of the company’s costs are labour, but it is also looking at discontinuing projects such as spending on technology and updating sorting offices. John Keggie, the deputy general secretary of the Communication Workers Union, described the measures as a “slash and burn policy”. He said: “Simply blaming the workforce won’t wash. This is the same workforce that made the Post Office a profitable organisation for over two decades.” Consignia faces intense competition, with companies such as Hays being given licences to operate in its traditional monopoly area. There has also been a drop in mail because of e-mail and text messaging.
