‘’One down, eighteen more strike days to go and Royal Mail is counting the cost of the huge upset to deliveries and volumes ahead of the crucial Christmas season. It now expects full-year losses to hit £350 million, which is the figure it had hoped to make in cost savings before the strikes erupted. Given the big downturn in business expected, on top of the contraction in the parcel boom, it says it may be faced with little choice but to reduce headcount by 5,000-6,000 by next August. Royal Mail had already been hit by waves of challenges, from a weakening of the pandemic parcel boom to fewer Covid test deliveries and a structural decline in letter sending. E-commerce deliveries have rebased to a higher level than pre-pandemic times which has been a welcome trend. But the company has been side-swiped by the worse than expected cost-of-living crisis, as inflation has been exacerbated due to the invasion of Ukraine, sparking much deeper industrial strife. Rebranding under International Distributions Services plc in the summer was meant to help the group repeat the success of its GLS global delivery arm across the UK business, but with relations with unions at rock bottom, it’s been unable to capitalise on this bright spot in operations. GLS is still on track to meet its full year targets, despite increased competition and inflationary headwinds. But the threat of further strike action means that no certainty can be given over the full year outlook for the Group as a whole.’’
