Royal Mail plans to cut around 700 manager jobs to “simplify and streamline operational structures.”
In a trading update for the last three months of 2021 Royal Mail said the move would save around £40 million, with around £30 million of that in 2022-23.
The firm has been hit with high levels of absence due to covid and this has resulted in complaints about delays.
Covid absence rates increased over Christmas and into early January 2022 to peak at around 12% (c. 15,000), double pre-COVID levels.
The trading update says: “This has resulted in increased costs and impacted quality of service in some areas of the country. We are providing targeted support to the local offices most affected by elevated absence.
“More recently absence has begun to reduce to below 10%. Our postmen and women are continuing to work incredibly hard, as they have done throughout the pandemic, and we thank them for all of their efforts and determination.
“Overall revenue performance was broadly in line with our expectations. The COVID-19 pandemic has resulted in a structural shift, with a permanent step up in the level of domestic parcel volumes compared to pre-pandemic levels.”
The firm says the Omicron wave is spreading across Europe and placing pressure on the availability of drivers and in-house labour in operations. Despite this Royal Mail says it has “been able to manage these challenges successfully, with good quality maintained across the GLS network during the peak season.”
Outlining plans for the restructure, the update says: “As a next step, subject to consultation, we intend to further simplify and streamline our operational structures to ensure an improved focus on local performance and devolve more accountability and flexibility to frontline operational managers.
“We are engaging with our unions on the proposals, which we expect will lead to a reduction of around 700 managers and deliver an annualised benefit of around £40 million, with around £30 million in FY 2022-23.
“To deliver this programme, we expect to incur a restructuring charge of around £70 million in Q4 2021-22, subject to consultation. The proposed changes in management structure are subject to statutory consultation with Unite/ CMA, and additionally we will work with the CWU to ensure that the impact of any proposals remains in line with our existing agreements.”