Royal Mail warns of possible job cuts under plans to cut second-class service

Royal Mail’s proposals would see it axe second-class deliveries on Saturdays, but keep a first-class service six days a week.

Royal Mail has warned up to 1,000 jobs could be axed under plans put forward to the industry watchdog
Royal Mail has warned up to 1,000 jobs could be axed under plans put forward to the industry watchdog (Stefan Rousseau/PA)

Royal Mail has warned up to 1,000 jobs could be axed under plans put forward to the industry watchdog to scrap second-class letter deliveries on Saturdays and cut the service to every other week day.

In its submission to Ofcom’s consultation on the future of the universal postal service, Royal Mail said its proposals would see all non first-class letter deliveries – including second class and bulk business mail – reduced to save it up to £300 million a year.

But it would keep a six-day-a-week service for first-class mail in a climbdown on previous calls for all Saturday letter deliveries to be scrapped.

Royal Mail revealed the proposals, if given the go ahead, would lead to “fewer than 1,000” voluntary redundancies as the plans would mean daily delivery routes cut by between 7,000 to 9,000 within two years.

The group insisted it would not expect to make any compulsory redundancies and hopes the roles can be reduced through natural staff turnover among its 130,000 workforce.

It claimed the proposals would not need a change in legislation, given it would still be delivering first-class post six days a week and called for Ofcom to put the changes in place by April next year.

Royal Mail said: “The proposal is designed to create a more financially stable future for the business and its shareholders, protecting tens of thousands of jobs and the best terms and conditions in the industry.

“It closely aligns to changes successfully made in comparable countries – in Europe and around the world – over recent years, with limited changes for customers.”

Liberal Democrat business spokeswoman Sarah Olney branded the plans a “slap in the face for families being asked to pay more for less”.

“It risks creating a cost-of-postage crisis, as people feel forced to pay for first class stamps because second class delivery days are being slashed,” she added.

Martin Seidenberg, group chief executive of Royal Mail owner International Distributions Services (IDS), insisted the group had “worked hard to come up with a proposal that is good for our customers, good for our people and would allow Royal Mail to invest in products and services”.

He said: “If we want to save the universal service, we have to change the universal service.

“Reform gives us a fighting chance and will help us on the path to sustainability.”

Ofcom has been consulting on the postal service reforms since January, with a deadline of April 3 set for responses.

A spokesman for the regulator said: “We’ll carefully consider all the feedback received, and provide an update in the summer.”

Under its universal service obligation (USO), Royal Mail must deliver letters six days a week to all 32 million addresses in the UK for the price of a stamp.

Royal Mail has long been urging the Government and Ofcom to review its obligations, arguing that it is no longer workable or cost effective, given the decline in addressed letter post.

In a long-awaited report in January, Ofcom revealed options for an overhaul of the universal postal service that could see Royal Mail’s letter delivery service slashed from six days to five, or even three, a week.

Another option mooted was to extend letter delivery times, with a more expensive next-day delivery service available when required.

The proposals sparked an outcry, with ministers quick to dismiss any suggestion that the Government would sanction the scrapping of Saturday deliveries.

The six-day-a-week service is part of the universal service requirement stipulated by law under the Postal Services Act 2011.

Royal Mail also said in its submission that it would change all standard bulk mail – such as bills and statements – to a second class service, meaning they arrive within three weekdays instead of two.

It added that it would like to add new reliability targets, as well as “revised, realistic” speed goals, and add tracking to universal service parcels.