Britian's Royal Mail plans up to 10,000 job cuts

British postal operator Royal Mail on Friday unveiled plans to axe up to 10,000 jobs, blaming the move partly on ongoing staff strikes that contributed to a first-half loss.

The announcement came one day after staff staged the first of 19 walkouts targeting the critical run-up to Christmas, joining several other UK sectors carrying out industrial action as sky-high inflation erodes the value of wages.

Royal Mail's job cuts follow "the impact of industrial action, delays in delivering agreed productivity improvements and lower parcel volumes", its parent group said in a results statement, sending shares tanking.

"Our operational full-time employee workforce will need to reduce by an estimated 10,000 by the end of August 2023," International Distributions Services added alongside news it had plunged into the red.

Gross mismanagement

The planned job losses comprise almost seven per cent of Royal Mail's total workforce of 150,000 people.

The restructuring includes up to 6,000 compulsory redundancies.

Dave Ward, general secretary of the CWU union that has organised Royal Mail walkouts, said the job cuts were "the result of gross mismanagement ".

He added there had been "a failed business agenda of ending daily deliveries, a wholesale levelling-down of the terms, pay and conditions of postal workers, and turning Royal Mail into a gig economy-style parcel courier".

The group suffered an operating loss of £219 million ($245 million) in the six months to the end of September, it added Friday.

That contrasted sharply with profit of £235 million a year earlier, when it was buoyed by strong parcel demand during the pandemic.

"It now expects full-year losses to hit £350 million, which is the figure it had hoped to make in cost savings before the strikes erupted," noted Susannah Streeter, senior investment and markets analyst at Hargreaves Lansdown.

The threat of further strike action beyond Christmas "means that no certainty can be given over the full year outlook for the group as a whole", she added.

Royal Mail said full-year operating losses could increase to £450 million should "customers move volume away for longer periods" as a result of strike action.

The share price of International Distributions Services was down more than eight percent at 192.65 pence in afternoon London trading, having recovered from even sharper losses following Friday's news.