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Royal Mail asks Government to cut letter service to five days under overhaul

Tom Bottomley
17 November 2022

Royal Mail has asked the Government for an early move to cut its letter service to five days a week as it unveiled hefty losses after a hit from crippling strike action.

Boss Simon Thompson vowed to do “whatever it takes” to turn the group around after half-year results showed it tumbled to a £219 million underlying operating loss in the 26 weeks to 25 September.

The group said three days of strike action in the first half cost Royal Mail around £70 million, while a further five days in October are estimated to have cost it about another £30 million.

It is in “intensive” talks with unions to avert further strike action but is making up to 6,000 redundancies amid a swingeing overhaul to turn around its fortunes.

And it has now formally asked the Government to switch from a six-days-a-week letter delivery service to five, covering Monday to Friday only, under its Universal Service agreement. The group will, however, look to maintain a seven-day parcel delivery service.

Simon Thompson, Chief Executive Officer of Royal Mail, said: “We have always been clear we need change to survive. We have started turning the business around and will do whatever it takes.

“We would prefer to reach agreement with the Communication Workers Union (CWU) but in any case we are moving ahead with changes to transform our business.”

A Government spokesman said there are “no current plans to change the universal service”.

He added: “While we recognise the issues that Royal Mail raise, there would need to be a strong case that showed changes would meet reasonable needs of users of postal services and ensure the financial sustainability of the universal postal service.”

In a statement late on Wednesday, Royal Mail said it had entered “intensive talks” with the CWU ahead of the next wave of strikes planned on 24 November.

It expects full-year losses of around £350-450 million, including the direct impact of 12 strike days – eight that have already taken place and four more that have been announced.

Royal Mail’s owner International Distributions Services (IDS), which was renamed from Royal Mail Group earlier this year and includes international delivery service GLS and Intragroup, reported pre-tax losses of £127 million for the first half, against profits of £315 million a year ago.

Royal Mail last month said it will consult on up to 6,000 redundancies as part of efforts to reduce full-time roles by 10,000, blaming industrial action for mammoth financial losses.

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