Union anger as Consignia set to shed 30,000 post jobs

Leaders of Britain's postal workers have threatened a national strike after the head of Consignia disclosed shock plans to axe up to 30,000 jobs over the next 18 months.

Chief executive John Roberts revealed yesterday to a committee of MPs that tens of thousands of posts could be cut as the group moves to reduce costs in the face of increasing competition and huge losses.

This comes on top of a reduction of around 10,000 in the organisation's 200,000 staff over the past year.

The disclosure stunned officials at the Communication Workers' Union last night who warned of industrial action to fight any compulsory redundancies.

Deputy general secretary John Keggie described 30,000 as a "Harry Potter figure" which had come as a bolt out of the blue.

The union warned earlier this year that up to 15,000 jobs could be lost under plans to make #1.2 billion of savings.

Mr Keggie said he was "astonished" that Mr Roberts had not mentioned the 30,000 figure during talks throughout this week on job security.

"Cutting 30,000 jobs would be a huge chunk of the workforce. It is extremely disappointing that the board has refused to share this kind of information with the union.

"It is a Harry Potter figure and it is not on. There is no prospect of the union accepting this level of cuts."

Mr Keggie added: "We are making it clear that there will be no strike before Christmas, but unless they change their view we will have to take strike action to defend the service in the long term for the customer."

Mr Roberts had told the House of Commons Trade and Industry Select Committee that up to 30,000 jobs would be cut at Consignia _ formerly the Post Office _ as part of a #1.2 billion savings package designed to get the organisation out of the red.

It is hoped that the bulk of the cuts will be reached through natural wastage, voluntary redundancies and outsourcing of contracts for activities like cleaning and catering, he told MPs.

Many parcel delivery routes are to be franchised out _ often to existing Parcelforce workers _ in order to cut costs, he said.

The staffing reductions have been forced on Consignia by tumbling profits, which saw the company record a #281 million loss in the first six months of this year, with operating losses quadrupling to #100 million.

Asked by committee members what the scale of job losses was likely to be, Mr Roberts said: "We haven't finalised numbers we are looking at if we produce the #1.2 billion.

"We could be looking at anything up to 30,000 redundancies."

Mr Roberts blamed much of the company's decline in profitability on the uncertain economic climate and the costs and delays caused by chaos on the railways since the Hatfield crash.

Total mail volume had grown by just 3% this year, compared with the predicted 6 as advertisers cut back on junk mail. Consignia expected growth to continue at this slower rate over the next five years.

The company had also had to absorb the cost of installing computers in post offices in the Horizon project and the ongoing losses at its package division Parcelforce, expected to reach #200 million by the end of the year.

The decision not to increase the cost of first and second class stamps this autumn had cost Consignia an estimated #96 million.

And the fashion for mobile phone text messaging was taking business away from Consignia, with up to 1% of its annual volume of deliveries being lost to the new way of keeping in touch.

Mr Roberts said that, as well as job cuts, money might be saved by transferring mail from trains on to road and air transport.

And he said that the unprofitable service in non-business parcels could be removed from Parcelforce and handed over to the Royal Mail as part of its obligation to provide a universal letter delivery service.

Previously-announced moves to scrap the second post for residential mail deliveries would also save Consignia money, he said.

Most European postal services now delivered between 10am and 4pm, while the Post Office worked flat-out to deliver a first post between 7am and 9.30am, only to find that it dedicated 30% of its resources to a second post which accounted for just 4% of mail, he said.

Cutting costs by #1.2 billion would bring Consignia in line with its international competitors, Mr Roberts told the committee.

Asked whether the company's financial difficulties indicated that the semi-privatised status it won last year was not working, Mr Roberts said: "It is too soon to say, after just 12 months.

"I do have concerns, but I would have thought we have to give it another 12 months."

Roger Lyons, of the MSF union, told BBC1's 10 O'Clock News: "We know Consignia needs to make savings. Everyone agrees with that. It's no secret that that's been the subject of detailed discussions.

"But the threat of 30,000 redundancies is so horrendous on the eve of Christmas that I have appealed to Consignia: `Come back to the table. Let's get through Christmas without this cruel cut'."

Shadow trade and industry secretary John Whittingdale said: "This is a further indication of the breadth of the crisis that is now affecting the Post Office.

"It is not possible for ministers simply to wash their hands of this problem."