Royal Mail to axe 1,600 jobs to cut costs

The British postal service company Royal Mail is planning to cut 1,600 managerial and head office jobs in order to deliver annual savings of £50 million.

The company said that the job losses will not affect frontline staff, only those working in managerial and head office positions.

Moya Greene, the Royal Mail chief executive said: “The cuts were necessary in order to effectively compete in the letters and parcels market, but the company would consult with the main workers’ unions over the job losses.”

The Communication Workers Union (CWU), which represents nearly 80 per cent of the Royal Mail workforce, called the cuts “deeply concerning” and Unite, a union representing 7,000 Royal Mail managers, said it was considering industrial action.

The Unite union’s Royal Mail officer Brain Scott said: “Unite is demanding a commitment to no compulsory redundancies on fair terms and an effective method for redeployment within the restructured organisation. If Royal Mail refuses we will have no alternative than to consider a ballot for industrial action.”

Royal Mail’s privatisation last October has attracted criticism after its shares surged almost 80 per cent above the initial offer price, prompting fears that it was undervalued by the government.

The company said that the job cuts will incur a charge of £100 million in 2013-14, taking its “transformation” cost to £220 million; it had originally expected a cost closer to £160 million.

Vincent Manancourt