UK’s Royal Mail says it will do whatever it takes to transform

  • Royal Mail approaches government for five-day letter delivery
  • Says CWU will go ahead with changes despite deal
  • Group revenue fell nearly 4%, IDS went into loss

Nov 17 (Reuters) – Britain’s Royal Mail will do “whatever it takes” to turn its business around, its chief executive said on Thursday, as the busy holiday period sees more postal attacks, if the company fails to deliver its most fails to complete the big deal. Labor union.

The Royal Mail and the Communications Workers’ Union (CWU), which represents its more than 115,000 postal workers, held extended talks late on Wednesday aimed at averting strike action this Black Friday and before Christmas.

“We have set out to transform Royal Mail, and we will do whatever it takes,” said Simon Thompson, CEO of Royal Mail.

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“We would have preferred to reach agreement with the CWU, but in any case we are moving forward with changes to transform our business.”

Royal Mail is embroiled in a bitter dispute with the CWU over pay and operational changes at the more than 500-year-old postal company, which has led to several days of strikes over the past few months.

The British branch of International Distribution Services (IDS) (IDSI.L) said it could cut up to 10,000 jobs and more layoffs and even more if it could not reach an agreement with the CWU. Financial loss can be warned.

The CWU rejected a new conditional wage offer in late October, subject to agreeing to changes such as Sunday work and flexible working hours.

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IDS reported a first-half adjusted operating loss of 57 million pounds ($67.88 million) on Thursday, while a profit of 404 million pounds last year was pulled down by Royal Mail. Its shares were down 2% as of 0858 GMT.

Royal Mail has seen a drop in parcel volumes from high levels amid the pandemic amid tight living conditions for customers and a tough economic climate in the UK.

IDS said the UK parcel market is expected to continue to decline and the volume of letters addressed, excluding elections, could fall by a high-single-digit percentage this financial year.

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The IDS said Royal Mail has approached Britain to move quickly from the current six-day delivery to five-day letter delivery.

The former British postal monopoly still expects a full-year adjusted operating loss for Royal Mail of around £350 million to £450 million. It is targeting a return to profitability in 2024-25 from cost-cutting.

Group revenue fell nearly 4% to 5.84 billion pounds for the six months to 25 September.

IDS kept its outlook unchanged for GLS, its international division, but added that GLS’s cost base has also been affected by cost and wage inflation.

($1 = 0.8397 pounds)

Reporting by Yadarisa Shabong in Bengaluru; Editing by Sherry Jacob-Phillips and Emelia Sithole-Mataris

Our Standards: The Thomson Reuters Trust Principles.

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