Consignia cuts 15,000 jobs

Up to 3,000 urban post offices could be closed

Consignia, the renamed UK post office, has said it is cutting 15,000 jobs as part of a plan to reduce costs and return to profit.

The majority of the job losses announced on Monday will be in the loss-making Parcelforce Worldwide business.

But many more jobs in the crisis-hit company are set to disappear in further phases of the restructuring, something Trade & Industry Secretary Patricia Hewitt said was "unavoidable".

Consignia's chief executive, John Roberts, said on Monday that the impact of its cost-cutting exercise would be around 30,000 job losses.

The number is far in excess of previous predictions that about 12,000 jobs would go.

Measures announced today are far reaching - but they are just the start, not the end

Consignia chairman Allan Leighton

Consignia is also likely to close more than 3,000 urban post offices and change its name to the Royal Mail, as part of a major shake-up aimed at cutting costs and ensuring the company's survival.

Unions have warned Consignia there could be strikes if it uses compulsory redundancies to make the cuts.

Allan Leighton was confirmed as chairman of Consignia, after holding the post on an interim basis since the end of January.

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He warned the company's finances were in a serious state, and further cuts could be expected.

"(The) measures announced today are far reaching - but they are just the start, not the end," he said.

"They will ensure that real progress is made in the first year of a three-year strategy to restore profitability, deliver positive cash flow, improve services and make the business a better place in which to work."

He added "More announcements regarding other parts of Consignia will be made as we agree detailed plans."

Cost-cutting

Consignia is losing £1.5m a day and the redundancies would be the greatest shake-up in the Post Office's 300-year history.

The bottom line for us is that there must be no compulsory redundancies

Peter Skyte, Amicus

The company hopes to save £1.2bn a year through the cuts, which come as the market for postal deliveries is opened up to competition in a three-stage process starting this year.

From July, Parcelforce Worldwide will concentrate solely on next-day and 48-hour deliveries, with its non-express deliveries being handled by Royal Mail.

The five parcel distribution centres which currently handle non-express deliveries will close along with 50 of Parcelforce Worldwide's 151 depots.

As part of its cost-cutting plans, Consignia will also cut the number of delivery vehicles in its fleet and move more mail by train.

Generous offer

John Roberts, Consignia's chief executive, said the company was holding face-to-face meetings on Monday with those affected.

He said they would offer as many of them as possible an option to stay with the business, or to take voluntary redundancy.

Consignia is expected to be renamed the Royal Mail

Mr Roberts said Consignia was committed to maintaining its ongoing dialogue with trade unions.

Managers hope to limit compulsory redundancies by offering one of the most generous severance packages ever from a state-owned company.

Peter Skyte, national secretary of the Amicus union, called for workers to be protected.

He said: "We recognise that Consignia has difficulties financially and organisationally.

"The bottom line for us is that there must be no compulsory redundancies.

"And given its current position the only way forward for the company, we would say, is to work in partnership with the unions to safeguard as many jobs as possible through mechanisms such as redeployment, early redundancy and voluntary retirement."

'Under siege'

Will any heads topple? Of course, the cannon fodder who actually deliver the service.
Gerry, Scotland

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Commenting on the possible closure of 3,000 urban post offices a spokesman for the Department of Trade and Industry (DTI) said the government was "committed to the maintenance of the network of post offices".

He added: "There would be extensive consultation if an office was going to close, but these would be operational matters for the post office. The programme has not even started yet."

Colin Baker, general secretary of the National Federation of Sub Postmasters, said plans to close some post offices had been around for months.

"It's part of a process of getting a much more viable and vibrant post office network that's going to stand the test of the future and won't be under siege like it is at the moment," he said.