The Royal Mail last night issued a fresh warning of heavy job losses amongst its 200,000 staff after its parent company Consignia crashed to a £281million loss for the first half of the year. Neville Bain the Chairman of Consignia said that the escalating losses underlined the urgency of achieving the £1.2billion cost savings announced this summer.
Read MoreINCREASING labour costs, poor industrial relations and unimaginative leadership have contributed to the “appalling” losses announced by Consignia, the Post Office consumer watchdog said last night.
Peter Carr, the chairman of Postwatch, delivered a scathing verdict on the performance of Consignia’s management and said that a change at the top was the company’s only chance of returning to profit.
Read MoreMost of the country couldn’t care less about the news that the Royal Mail is thinking of abolishing its second daily delivery, and charging extra to businesses that want their letters and parcels delivered before 9.30am. Even Postwatch, the official watchdog, has welcomed the announcement, saying that it is good that Consignia is looking at all the options.
Read MoreBusiness Post, one of the UK’s leading express parcel delivery companies, has
been awarded a licence to operate mail services for business customers from 1 April 2002. This is the first time since the inauguration of the Royal Mail over 360 years ago that a private sector company will collect mail from a broad range of customers. It is estimated that annual turnover in the UK postal market is around #6.5 billion.
Read MoreThousands of jobs may be axed at the postal services group Consignia in a swingeing cost cutting programme condemned last night by unions as a policy of “slash and burn”.
Around one in 10 jobs could disappear in some areas of the Royal Mail and Post Office organisation in plans to cut costs by pounds 1.2bn over the next 18 months. Capital spending programmes are expected to be cut and some parts of the business could be hived off to private companies.
Other savings under consideration include scrapping second deliveries which carry only a small amount of mail but are relatively expensive.
Consignia, formerly the Post Office, said it needed to make the cuts – equivalent to 15% of its total costs – to improve efficiency in the face of new commercial pressures in Britain’s postal services.
As managers began briefing staff about the proposals yesterday morning, the state owned group insisted that no decision had yet been taken on the overall level of job losses.
But the cost cutting exercise, applauded by Postwatch, the consumer watchdog, drew a withering response from Post Office unions which have pledged to fight a “cack handed, panic measure”.
Strike action has not been ruled out. John Keggie, deputy general secretary of the Communication Workers Union, said the government had to ask how a business that was profitable for 20 years before commercial freedom was granted was now in such a financial mess.
“Blaming efficiency levels and the workforce is just not on,” he said last night. “The measures being proposed by the Consignia board can only be described as a ‘slash and burn’ policy. Any attempts to outsource parts of the industry into private hands or to introduce compulsory redundancy will be vigorously opposed.”
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