2001 30,000 postal jobs ‘to be cut’

Up to 30,000 Post Office workers could lose their jobs over the next 18 months, Consignia, the company which runs the service, has announced. 

The company previously said it was to launch a £1.2bn cost-cutting package but today’s news was the first indication of the scale of the jobs affected. 

Consignia’s Chief Executive John Roberts made the announcement as he spoke to the House of Commons Trade and Industry Select Committee today. 

“We haven’t finalised numbers. We could be looking at anything up to 30,000 redundancies,” Mr Roberts said. 

Mr Roberts said it is hoped the bulk of the cuts would be through natural wastage, voluntary redundancies and contracting out activities like cleaning and catering. 

He also said many parcel routes would be franchised out. 

Consideration would also be given, he said, to transferring mail from trains on to road and air transport. 

Earlier this year Consignia announced a reduction of about 10,000 managers’ positions with many of the staff affected to be moved to other jobs. 

Consignia has been hit by falling profits and lost £281m in the first six months of this year. 

It aims to cut costs by 15% by March 2003 in order to stay profitable and inline with competitors. 

Bosses blame the losses on the rising popularity of e-mail and text messaging along with the current economic climate and the rail chaos since the Hatfield crash. 

Other factors are also said to be the cost of installing post office computers, Parcelforce’s losses and the autumn decision not to increase stamp prices. 

But Mr Roberts refused to be drawn on whether the company’s semi-privatised status had anything to do with its financial difficulties. 

Courtesy BBC News

In context

The announcement was met with the threat of strike action from postal unions. 

They argued any compulsory redundancies would force Post Office workers on to the picket line creating further profit slumps for Consignia. 

The company appointed a new chairman, Allan Leighton, in 2002 to turn round the fortunes of the Post Office and bring it back into profit. 

He did this but at a cost – 30,000 jobs were cut and and thousands of post offices were closed in order to stem losses that peaked at more than £1bn in the year to March 31 2002. 

The organisation reverted to the name Royal Mail Group plc split into three divisions – Royal Mail, delivering letters, Parcelforce, delivering parcels and Post Office Limited, managing the nationwide network of post office branches as retail outlets. 

From January 1, 2006, the Royal Mail lost its 350-year monopoly and the UK postal market became fully open to competition.