Royal Mail has said it will cut 2,500 jobs as the ailing postal service now owned by Czech billionaire Daniel Křetínský seeks to reduce costs to fund a £500mn plan to improve delivery times.
The former state-owned company said the job losses, to take effect before the end of next year, would be in administrative and support roles and would not involve those in customer-facing positions such as mail delivery workers and delivery drivers.
Alistair Cochrane, Royal Mail chief executive, said the changes would remove “duplication” and allow it to “invest further in the service we deliver for our customers”, as the company attempts to reorientate itself away from letters to parcel delivery.
The job losses, which will affect fewer than 2 per cent of Royal Mail’s 131,000 staff, are the first since Křetínský paid £5.3bn for the business last year.
Royal Mail has long struggled to meet delivery targets and has lagged behind developments in an evolving industry. The £500mn investment plan, which seeks to improve delivery services, was announced in April after Křetínský’s takeover.
The company said in June that it had managed to deliver only 75.7 per cent of first-class mail on time, well short of its 93 per cent target.
Communications watchdog Ofcom has launched a probe into “unacceptable” delivery levels at Royal Mail and last year fined the company £21mn for missing delivery targets.
Křetínský told the House of Commons business and trade committee in March that he was “deeply sorry” for the state of the business.
Royal Mail said this year that it would scale back some services, including by reducing the number of delivery days for second-class letters. The company said the changes had helped improve first-class delivery times by 9 per cent year on year.
It is also attempting to push further into the highly competitive parcels market, competing with the likes of Amazon, DPD and DHL. Last month it bought Quadient UK, which owns 3,000 parcel lockers. It said cost savings from the job cuts would help fund its growth into parcels.
Martin Walsh, deputy general secretary of the Communication Workers Union, said the job losses were another blow to staff morale.
“We will be meeting management to discuss this announcement, which is further evidence of a company that is demoralising staff and failing to deliver for customers and the wider community.
“We urge the government to confront the reality of a collapsing Royal Mail and intervene to save this national institution.”
Unite general secretary Sharon Graham said: “This is not good for employees or customers. It will not improve quality of service and the workforce must not be made the scapegoats for poor decisions made by the company, government or Ofcom.”
Additional reporting by Alice Hancock in London