Royal Mail has proposed cutting salaries for new postal workers and recruiting more temporary staff, risking further backlash as it threatens to slash up to 10,000 full-time roles.
Dave Ward, general secretary at the Communication Workers Union, told the Financial Times that Royal Mail had suggested cutting salaries for new employees by about a fifth, from roughly £25,000 to £20,000.
A Royal Mail spokesperson confirmed that in meetings this week it had told the union it needed “to look at different salaries for new starters”.
The company already employs some independent contractors but is considering whether they need to make up a higher proportion of staff, the spokesperson added.
The proposals are the latest sign of the looming crisis facing Royal Mail as it races to cut costs in the face of competition from younger competitors that rely on temporary delivery staff with less generous salaries and employment terms.
On Friday morning, not long after postal workers began 19 days of strike action over pay and conditions, Royal Mail said it planned to axe about 5,000 roles by March and the equivalent of about 10,000 positions by August next year. The company requires “urgent change” and a “modernisation of working practices”, it warned.
Ward said the union supported change, adding it had never suggested Royal Mail “can be doing what we did 20 years ago and think we can sustain jobs in this industry”.
But the Royal Mail spokesperson said the CWU had refused to engage in formal negotiations. Proposals on salary cuts and temporary staff had not been made formally and were part of “broad discussions” on changes that could be made, the person added.
Royal Mail, which was launched as a public service in 1635 and privatised in 2013, on Friday reported a first-half adjusted operating loss of £219mn, down from a £235mn profit during the same period last year as strike action and a decline in parcel volumes hit sales.
The group said it expected a full-year adjusted operating loss of about £350mn.
The company’s share price fell as much as 10 per cent, extending its slide for the year to 55 per cent.
In March, management threatened a separation of the brands Royal Mail and GLS, its international parcel-sorting business that has remained profitable even as the UK business suffers.
Ward said a split would amount to “asset stripping” that could leave workers in the UK business more vulnerable.
