Royal Mail has revealed plans to cut 700 managerial positions to make an annual saving of £40 million.
The company released its trading update today where it was announced that hundreds of jobs would be cut in an effort to save costs.
Royal Mail revealed that 439 million parcels were handled during Q3 2021, with domestic parcel revenue growing by 43.9% Q3 2019-20, and declined by 4.9% year on year.
“We expected some decline in parcel volumes given most retail stores were open during the period, unlike last year. However, the trend towards customers wanting more parcels remains, and responding to that change efficiently is key,” said Keith Williams, Chair at Royal Mail
With the rising incidence of positive Covid-19 tests from the Omicron wave, absence rates remained elevated during Q3 compared to the previous year and increased over the Christmas period and into early January 2022, according to Royal mail, which led to a peak at around 12% (c. 15,000), which was double pre-pandemic levels.
Royal Mail said that this led to increased costs and impacted quality of service in some areas of the country.
Overall Royal Mail revenue decreased by 5.8% year on year, but grew by 9.8% over two years.
To simplify its offering, the company has decided to cut 700 managerial jobs, to deliver an “annualised benefit of around £40 million, with £30 million in 2022-23.
Simon Thompson, CEO of Royal Mail said: “We have today entered into formal consultation on a management reorganisation to further streamline our operations and, at the same time, improve focus on local performance.”