Royal Mail threatens to split up business as it reports losing £1m a day

theguardian.com:

Royal Mail has reported it is losing £1m a day and has threatened to split if it cannot achieve “significant operational change”, as it faces what could be the biggest strike of the summer.

The day after the Communication Workers Union (CWU) announced thousands of Royal Mail workers had voted in favour of industrial action, the company said it was considering all options, including separating its domestic and international businesses under a rebranded holding company called International Distributions Services.

In a frank statement to the stock market on Wednesday, the company revealed an adjusted operating loss of £92m between April and June. It said deliveries of Covid-19 test kits and items bought online had tumbled over the quarter compared with a year earlier, contributing to a 11.5% fall in revenue alongside a long-term decline in letter deliveries.

Royal Mail said it had worked to reduce its variable labour costs by cutting back on overtime and the use of temporary workers, but added that it had not been able to cut costs quickly enough to match the lower volumes of parcels and letters.

The company also blamed the operating loss on what it called a “disappointing performance” in making the business more efficient.

On Tuesday, the CWU announced the results of its ballot of its postal worker members in a dispute over pay. Almost 97% voted in favour of strike action, on a 77% turnout.

The CWU and Royal Mail have both said they are prepared to return to the negotiating table, but the union said that if a deal could not be reached, it would notify the company of the strikes, which are expected to take place in August.

The Royal Mail’s chief executive, Simon Thompson, said on Wednesday that the company needed to “transform the