Royal Mail reports £1bn loss after postal workers’ strikes
Royal Mail has reported a £1bn loss, with bosses blaming strike action by workers and a failure to increase productivity for its poor performance during a year in which it cut 10,000 jobs.
The poor performance led International Distributions Services (IDS), which owns Royal Mail, to report an overall loss of £748m for the year to 26 March. That compares with a profit of £577m a year earlier.
IDS said Royal Mail swung to a loss “due to industrial action” by unionised staff over pay and working conditions that eventually led to the resignation of its chief executive, Simon Thompson, last week, as well as an “inability to deliver the in-year benefits of planned productivity improvements”.
While the company finally reached a deal which the union agreed to put to its membershiplast month, the postal service also suffered a drop in demand for Covid test kit deliveries, as well as a dip in online shopping, which led to a boom in parcel deliveries during the pandemic.
Together, those problems overshadowed what IDS said were successful efforts to cut costs and “rightsize” the business in the second half of the financial year.
Those efforts included slashing 10,000 jobs at Royal Mail, a target it reached months before schedule and which will save the business about £150m over the next financial year. “There are further revisions to come during the course of the current year,” IDS said.
The company said its deal with the Communications Workers Union, which will be voted on by members at the end of the month, opened the door for “further operational efficiencies” that would make Royal Mail more competitive.
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