Royal Mail to cut 1,600 jobs following privatisation to 'reduce costs'

Unite Union said Royal Mail is "ruthlessly sacrificing jobs"
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Royal Mail is planning to cut 1,600 jobs in a bid to slash costs just months after the postal delivery service went public.

Royal Mail plans to create 300 new or enhanced roles, cutting 1,300 jobs- mainly managerial positions- in a move that could save the newly privatised company around £50 million a year.

The postal delivery service said the cuts will not affect postmen or the services provided to customers.

Chief executive Moya Greene said the cuts were necessary if Royal Mail wants to "compete in the letters and parcels market" effectively.

Royal Mail said it would start consultations on the plan with Unite, which represents around 7,000 Royal Mail managers, and CWU on Tuesday.

Unite union's Royal Mail officer Brian Scott said Royal Mail is "now about making profits, rather than serving the nation" and described the cuts as "ruthless".

He said: "First the Government sells off Royal Mail on the cheap and now the newly privatised service is ruthlessly sacrificing jobs.

"We do not believe that it's a coincidence that this announcement has been made just before the company prepares to announce its first full set of accounts since privatisation.

"It's more proof that Royal Mail's primary reason for existing is now about making profits rather than serving the nation.

"For all that Royal Mail managers have been through they do not deserve to be treated in this way.

"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 refuse, we will have no alternative than to consider a ballot for industrial action."

Dave Ward, deputy general secretary of the Communication Workers Union, which represents 134,000 postal staff, branded the job cuts “deeply concerning”, and warned the union will "fight to protect as many jobs as possible".

The announcement comes just three months after Royal Mail struck an agreement with union leaders on pay, pensions and other issues linked to the privatisation.

The 500-year-old postal service only narrowly avoided a strike at Christmas, after reaching a last-minute pay deal giving delivery workers a three-year pay rise worth about 9 per cent.

Ahead of the annual results in May, Business Secretary Vince Cable has also warned on Greene’s pay, saying that a salary increase of more than 3 per cent could prompt the Government, which retains a 30 per cent stake, to vote against Royal Mail’s remuneration policies. That contrasts with the views of chairman Donald Brydon, who believes Greene deserves a substantial pay rise.

Shares in Royal Mail today fell 8p to 576p — still sharply higher than their 330p float price, which has seen critics brand the sell-off "botched".