The Royal Mail has today (June 25) announced that it plans to sack 2,000 managers, prompting Unite to slam the company for making short-term cuts that will damage the privatised company’s future viability.
The Royal Mail Group highlighted the struggles it has faced with the coronavirus pandemic amid the decision to axe 2,000 out of 9,700 managerial roles, but the mail delivery service, which was privatised in 2013, has for years suffered declining profits. This is the result, Unite has said, from bosses’ poor decision-making.
Royal Mail interim chief executive Keith Williams, who took over after the surprise departure of Rico Back in May, blamed the trend of more parcels and fewer letters being sent, adding, “Covid-19 has accelerated those trends, presenting additional challenges.”
Williams, who himself was a former executive for British Airways, said that the Group would need to make £130m in savings by next year and needed to take ‘immediate action’ to make these savings.
In the year to March 2020, the Group posted a profit of £180m, down from £241m the year previous. Royal Mail confirmed that frontline postal staff will not be affected by the decision but warned that many frontline roles will go in future as letter and parcel processing become automated.
Of the 2,000 managerial roles to be culled, it is understood the axe will fall primarily on senior roles in IT, finance, marketing and sales.
Despite quitting in May, former Royal Mail Group chief executive Rico Back will continue receiving his salary until August 15 under gardening leave. He will also receive nine monthly payments totalling nearly half a million pounds in lieu of working his notice period.
Unite has slammed today’s decision, with Unite national lead officer for the Royal Mail Group Mike Eatwell commenting, “The announcement today by Royal Mail to sack 2,000 managers is a classic example of trying to reposition a business to create a viable long-term future, while feeling under pressure to make short-term cuts that only hinder that transition.
“It also deflects attention from where the real problems lie,” he said. “Poor decision-making at the top of Royal Mail in the past has failed to recognise the pace in the decline in the volume of letters, and there has been a too slow investment in technology and facilities to keep abreast of the huge growth in parcels. This scenario has been made worse by the adverse impact of coronavirus on the economy.
“This has led to this situation where Unite’s more than 6,000 members are now facing an uncertain future – it is a devastating blow for them,” he added. “They are the managerial team who were tasked to carry out the board’s decisions.
“We will be pressing the top management to clarify how sweeping away the very employees managing the transition process is going to produce faster and better company decisions for the benefit of customers,” Eatwell went on to say.
“Our members have always worked with the Royal Mail, but they will be holding the company to account to justify the window dressing of this cost cutting and how it is in the interests of employees, shareholders and customers.
“Our aim is to avoid compulsory redundancies and we believe that any job losses that do occur should be voluntary and by natural wastage.”
By Hajera Blagg