Consignia to cut 30,000 jobs in drive for mail efficiency
CONSIGNIA, the renamed Post Office, is to reveal detailed plans within three weeks to shed up to 30,000 jobs. The redundancy programme will lead to one of the biggest culls of middle management in British corporate history.
Up to 10,000 “suits” are expected to lose their jobs as part of the shake-up. The board believes that huge savings can be achieved by stripping away layers of “inefficient” middle management.
The job cuts will be every bit as brutal as John Roberts, the group’s chief executive, had predicted last October when he said that Consignia was facing a “financial crisis”. The group has given a written assurance to the Communication Workers Union (CWU) — which represents the 80,000 postmen and sorting office workers — that there will be no compulsory redundancies. However, there are now concerns in the union that Consignia may break this promise.
John Keggie, deputy general secretary of the CWU, says if the group does so then the result will be immediate strike action. “We will also demand that the Department of Trade and Industry sacks the entire board,” he said.
Keggie said the union was not opposed to change. “What we are not going to allow is a systematic dismantling of the service so that just a few directors can save their necks. The company appears to want to make the cuts to save money. It does not want to make them as part of a long-term strategy to make it more efficient,” he said.
Consignia is keen to avoid strike action and hopes that up to half the redundancies from the 220,000-strong workforce can be achieved through natural wastage. As well as targeting middle management, Consignia will make big job cuts in the sorting offices, which are heavily unionised. When the review is published it will be the most detailed report ever provided by Consignia.
The group will identify where the £1.2 billion of proposed annual savings can be achieved. Part of this will be through contracting out its vehicle maintenance, building and IT divisions. This could save £60m in maintenance alone but is strongly opposed by the CWU which fears job losses. Other elements of the shake-up include the possible scrapping of the second daily post delivery to households.
It is hoped that the changes, which will cost £500m-£1 billion to implement before savings feed through, will be completed by March 2003.
Roberts hopes the changes will position Consignia to compete against its international rivals, which may mean splitting the group into two companies. One would house Royal Mail and Parcel Force and the other would be Post Office Counters, which runs the network of 17,800 post offices.
The group has just appointed headhunters to find a new chairman to replace Neville Bain, who stepped down at the end of last year. In the interim, Consignia is being run by Allan Leighton, the former chief executive of Asda, the supermarket group.
Meanwhile, postmen are threatening strike action over a proposed pay deal. The government is aware that the structure of Consignia is unworkable and big changes are needed if the group is to compete against overseas rivals.
Critics have dubbed Consignia the “new Railtrack” and say it is another example of the government failing to provide a public service.
Sunday Times
