Royal Mail, a British postal service, announced plans to lay off up to 10,000 employees. The company largely justified the decision by blaming continuous labour strikes for the company’s first-half loss.
The news came only one day after employees conducted the first of 19 planned walkouts in the run-up to Christmas, joining many other UK industries in taking strike action as sky-high inflation erodes the value of earnings.
In a results statement, Royal Mail’s parent company stated the job cuts were due to “the impact of industrial action, delays in delivering anticipated productivity gains, and decreasing parcel volumes,” sending shares plummeting.
The postal service has indicated that it will initiate the process of telling staff of its proposal, which might cause up to 6,000 layoffs, most of which will be due to redundant positions.
The corporation will also remove roles through natural attrition, such as not replacing departed personnel.
Royal Mail is currently grappling with inflationary difficulties, a cost-of-living pinch, and a drop in parcel volumes, despite having benefited from the internet shopping boom during the COVID-19 epidemic.
In the first half of the year, Royal Mail saw adjusted operational losses of 219 million pounds, and it projected that losses for the entire year would be near 350 million pounds.
If consumers migrate to other providers, the losses might rise to 450 million pounds this year, and the corporation could see even greater losses if additional strikes are called during the holiday season.
After months of fruitless negotiations over wage and operational reforms, the Communication and Workers Union (CWU), which represents 115,000 Royal Mail postal workers, staged strikes in September and early October and has threatened additional strikes.
Members of the Communication Workers Union, who work for Royal Mail, began a new series of strikes this week over pay and conditions, which will last 19 days, including Black Friday.
Royal Mail’s move, according to Dave Ward, CWU General Secretary, “is the outcome of bad mismanagement and a failing business goal of discontinuing daily deliveries, a total levelling-down of postal workers’ terms, pay, and conditions, and turning Royal Mail into a gig economy style parcel carrier.”
Royal Mail’s parent company, International Distributions Services (IDSI.L), formerly known as Royal Mail Plc, recently issued a statement urging the Communications Workers of America (CWU) to immediately halt planned strike action and embrace their offer of Acas talks to urgently find a resolution to the current dispute.
Simon Thompson, the CEO of Royal Mail, said: “It’s a very sad day today. I am sorry to announce these employment losses. We will use every effort to prevent forced layoffs and assist those who are impacted.”
The loss for the entire year will considerably increase, according to Royal Mail, and more operational restructuring and workforce reductions may be necessary.
Royal Mail reported that strike action cost the company £70 million during the first half of its fiscal year, resulting in an operating deficit of £219 million as opposed to a profit of £235 million the previous year.
