Business

Royal Mail to axe thousands of UK jobs as postal service swings to loss

Service blames £70mn financial hit on three days of industrial action by workers

Royal Mail postal workers have planned 19 days of industrial action to ask for a pay rise taking into account both the cost-of-living crisis and the contribution of postal workers during the Covid pandemic. Photograph: Justin Tallis/AFP via Getty Images

Fri Oct 14 2022 - 09:24

UK postal service Royal Mail warned that as many as 10,000 jobs were at risk in response to strikes as it swung to a first-half loss.

The postal service blamed a £70 million (€80.9 million) hit on three days of industrial action in August and September after workers downed tools in a dispute over pay and conditions. Royal Mail on Friday posted a first-half adjusted operating loss of £219 million (€253 million), down from a £235 million (€271 million) profit in the same period last year.

The group said, based on current estimates, it may need to make 5,000 to 6,000 redundancies by the end of August next year.

It estimates it will axe 5,000 full-time roles by March and about 10,000 jobs by August, on a rolling 12-month basis.

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“This is a very sad day,” said chief executive Simon Thompson. “I regret that we are announcing these job losses. We will do all we can to avoid compulsory redundancies and support everyone affected.”

Starting on Thursday, workers represented by the Communications Workers Union have gone on strike again, asking for a pay rise taking into account both the cost-of-living crisis and the contribution of postal workers during the Covid pandemic. A further 18 days of one-day industrial actions are planned before Christmas.

The union’s “decision to choose damaging strike action over resolution regrettably increases the risk of further headcount reductions”, Mr Thompson added.

Royal Mail estimates a full-year adjusted operating loss of about £350 million, including the hit from eight days of industrial action. This could increase to £450 million.

“The ongoing uncertainty means that the board is unable to give a clear outlook for the full year,” it said.

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