Royal Mail cull: why? |
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| Economy | |
| Written by Gary Howes | |
| Friday, 06 February 2009 | |
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This morning it has emerged that the Royal Mail has announced plans to slash a massive 16,000 jobs. The cull comes despite the company announcing its first profits in 20 years on January the 21st.The job cuts could unleash further industrial unrest in an economy already experiencing unrest over the issue of jobs. The proposed losses — amounting to almost one in ten of the company’s workforce is a drive to reduce the wage bill by £470m. The Times reports that unions are already preparing to fight the introduction of a commercial partner to the business. In January it was announced in a trading update covering the nine months to Christmas that the Royal Mail Group made a £255 million operating profit before exceptional costs – compared to £162 million for the whole of 2007-08. Allan Leighton, Chairman of Royal Mail Group, said when announcing the profits on January 21st: “The company and its people have come a long way in just six years when Royal Mail was losing more than £1 million a day and routinely failing quality of service targets. A huge amount has been done to put the business on a stable footing – something many believed was not possible – and having established a firm base on which to build for the future, we are getting on with our modernisation plans and catching up on decades of under-investment.” The improved financial performance comes as Royal Mail continues to modernise the Letters operation, which has now automated the handling of almost 80% of total mail volumes, compared to less than 65% two years ago. During the last 18 months, the company has begun to upgrade automatic sorting equipment in many mail centres nationwide, the installation of the first of a new generation of “intelligent” letter sorting machines has commenced, more technology to sort more A4-sized mail - including catalogues and magazines - has been installed, and Royal Mail drivers have been equipped with hand-held scanners which read the barcodes on Special Delivery and other tracked mail and can provide electronic confirmation of delivery within minutes. Comments (1)
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"We have absolutely no plans to cut 16,000 jobs but there is a programme to cut overheads and central costs which is not about our front line people."
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