Royal Mail could lay off up to 10,000 workers, and the company has warned of more cuts if strike action continues.
The dispute with its largest union has resulted in even deeper losses this year, with shares falling 10 percent.
In September and early October, the Communication and Workers Union (CWU), which represents 115,000 Royal Mail postal workers, held strike action over pay and operational changes.
More strikes are planned in the run-up to Christmas which could make the situation worse.
Parent company International Distributions Services said on Friday, October 28: “Royal Mail urges CWU to immediately call off planned strike action and embrace our offer of Acas talks to urgently find a resolution to the current dispute”
The CWU was enraged by its proposals last month to take the pay dispute to arbitration and change its policies.
According to the holding company, 5,000 to 6,000 jobs could be lost.
By the end of August next year, up to 10,000 jobs could be eliminated on a rolling 12-month basis.
Overtime, temporary staff, and natural attrition are all included.
CWU General Secretary Dave Ward said: “This announcement is holding postal workers to ransom for taking legal industrial action against a business approach that is not in the interests of workers, customers or the future of Royal Mail”
“The CWU is calling for an urgent meeting with the Board and will put forward an alternative business plan at that meeting.”
While the pandemic boosted online shopping, Royal Mail has been working on a transformation plan to shift its focus to parcels amid declining letter volumes.
It now faces inflationary pressures, a cost-of-living squeeze, and a drop in parcel volumes.
In the first half of the year, Royal Mail suffered an adjusted operating loss of £219 million.
It is expected that total losses for the year will be around £350 million.
If customers switch to other providers, losses could rise to £450 million this year.
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More strikes during the holiday season could push the UK economy further into the red.
“Due to the ongoing uncertainty, the Board is unable to provide a clear outlook for the full year,” it said.
Shares fell up to 17 percent to their lowest level since September 2020.
According to the company, GLS, its international distribution network, has performed as expected.
Royal Mail, the former British postal monopoly, recently changed the name of its holding company from Royal Mail Plc to International Distributions Services.
Source: Global banking and Finance