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Wednesday, 12 December, 2001, 18:04 GMT
Consignia backpedals on job cuts
Sealed post box
E-mail is threatening traditional mail deliveries
Consignia - the renamed Post Office - will meet with postal workers' unions on Thursday to try and prevent strike action over 30,000 possible job cuts.

Any suggestion of compulsory redundancies will lead to appropriate industrial action

John Keggie
Consignia outlined plans to shed 15% of its workforce to the government on Tuesday evening.

But as the threat of a strike mounted throughout Wednesday, the firm begun to back-pedal furiously, stressing that the proposed cuts are still speculative.

Union leaders said they would hold a ballot for strike action unless the threat of compulsory job losses was removed.

The scale of the proposed cutbacks prompted immediate outrage among workers, unions and the British public, concerned over the quality of their postal service.

Compulsory or voluntary?

Consignia is struggling to cut costs after its previously profitable business plunged into the red during the last two years.

Changed name from the Post Office in Mar 2001, when it became a state-owned limited company
Comprises more than 20 companies worldwide including Royal Mail, Parcelforce and the Post Office branches
Employees 200,000
Chief executive John Roberts, with the postal firm since 1967

Speaking to the House of Commons Trade & Industry Select Committee on Tuesday, Consignia's chief executive John Roberts was asked what the scale of job losses was likely to be.

"We haven't finalised numbers we are looking at if we produce the 1.2bn [savings]. We could be looking at anything up to 30,000 redundancies," he said.

But Mr Roberts stressed on Wednesday that no final decisions had been taken about possible job losses.

And he also pledged that, where possible, any redundancies would be either voluntary or by natural wastage.

The firm has a high labour turnover of about 20,000 people a year, but resigning staff will not necessarily match up geographically with where Consignia wants to cut back.

A generous pension fund arrangement for early retirements may also encourage voluntary redundancies.

The Communications Workers Union, which represents more than 90% of post office workers, described Mr Roberts' comments as a "tactical withdrawal" and said the threat of industrial action was still on.

The two parties will meet on Thursday to thrash out the issues involved.

'Horrendous Christmas'

Communication Workers' Union (CWU) deputy general secretary John Keggie said the number of losses was "completely unreasonable".

The threat of 30,000 redundancies is so horrendous on the eve of Christmas

Roger Lyons
MSF Union
The number of job cuts was also criticised by Roger Lyons, the leader of the MSF Union which also represents postal workers.

He told the BBC: "The threat of 30,000 redundancies is so horrendous on the eve of Christmas that I have appealed to Consignia: 'Come back to the table. Let's get through Christmas without this cruel cut'."

These job cuts would come on top of a reduction of about 10,000 in the company's 200,000 workforce over the past year.

It's frightening. You don't know what's going to happen day to day. You don't know where they're going to make these cuts.

Reggie Alexander, post office worker
"It's frightening. You don't know what's going to happen day to day. You don't know where they're going to make these cuts," said Reggie Alexander, who has worked for the post office for nine years and who said he backed strike action.

In May, the postal service across much of the country was paralysed by a series of wildcat strikes by 6,000 workers over commercially-inspired changes to working practices.

Savings consensus

Peter Carr, the chairman of the postal industry watchdog Postwatch, said Consignia was in financial crisis and cutting jobs was the right thing to do.

It is inevitable in reducing costs that they have to attack the labour costs

Peter Carr
"What one has to remember is that 70% of Consignia's costs are labour, therefore it is inevitable in reducing costs that they have to attack the labour costs," he told the BBC Radio's Today programme.

The company's increasing losses were attributed to the downturn in the economy and the costs and delays on the railways following the Hatfield rail crash.

And growth in total mail volumes is being hit by the increase in e-mails and text messaging, and the decline in junk mail due to less advertising.

The BBC's Rory Cellan Jones
"Postal workers are now facing the same cutbacks seen in other former state run monopolies"
John Roberts, chief executive of Consignia
"30,000 is very much an indicative could well be a lot less"
Chancellor of the Exchequer Gordon Brown
"It is not the government's job to run the day-to-day affairs"
See also:

12 Dec 01 | Scotland
Post union calls for political help
11 Dec 01 | Business
Consignia to cut up to 30,000 jobs
12 Dec 01 | Business
Q&A: The Post Office Crisis
12 Dec 01 | Business
Consignia clashes with the unions
26 Nov 01 | Business
UK post operator loses 1.5m a day
03 Oct 01 | Business
Consignia cuts 1bn to stem 'crisis'
13 Jul 01 | Business
Consignia to axe 2,100 jobs
26 Jun 01 | Business
Post office jobs warning
31 May 01 | Business
Consignia considers outsourcing deal
09 Jan 01 | Business
UK Post Office name change
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