Royal Mail plans to cut 1,600 jobs

Royal Mail is planning to cut 1,600 roles as part of a drive to cut costs, mainly among its head office managerial staff.

The postal delivery service says the net effect will be 1,300 job losses, as it plans to create 300 new or enhanced roles at the same time.

It says the cuts are part of its aim to make cost savings of £50m a year.

Unite, a union which represents 7,000 Royal Mail managers, warned the cuts could spark industrial action.

Royal Mail - which currently employs about 150,000 people in total - said it would start consultations on the job cuts with both Unite and CWU on Tuesday.

It emphasised that the cuts would have "no impact" on frontline employees including postmen and women.

The company said it expected the job cuts to reduce costs by about £25m in 2014-15.

Union warning

Royal Mail chief executive Moya Greene said the cuts were necessary for it to "effectively compete in the letters and parcels markets".

The company, which floated on the London Stock Exchange last year, said 50,000 of its employees had left since 2003.

The Unite union described Royal Mail's proposals as "ruthless".

"Royal Mail's primary reason for existing is now about making profits rather than serving the nation," said Brian Scott, Unite officer for Royal Mail.

"Unite is demanding a commitment to no compulsory redundancies on fair terms and an effective method for redeployment within the restructured organisation. If Royal Mail refuse we will have no alternative than to consider a ballot for industrial action."

Royal Mail said making the cuts would cost it about £100m, taking its cumulative "transformation" costs for 2013-14 to £230m.

It had originally expected transformation costs for the period to be £160m.

Despite the costs, it said it still planned to invest about £1.2bn into the business between 2013 and 2015.