Royal Mail to cut 2,000 jobs as losses mount from coronavirus crisis

Royal Mail will cut 2,000 jobs as the company looks to significantly reduce costs.

The firm - whose revenues have been hit hard by coronavirus - is to slash management roles as part of a plan to save costs of £130 million.

Keith Williams, interim executive chair, at Royal Mail said: "In reality, our UK business has been facing significant headwinds for some years. We have not always been as agile as we might have liked when responding to change in the marketplace and customer needs.

"We're taking immediate action on costs, which will result in a £130 million saving in people costs next year, along with a reduction of around £300 million in capex across the Group over the next two years.

"Regrettably, we are also proposing a management restructure impacting around 2,000 roles. We are committed to conducting the upcoming consultation process carefully and sensitively. We will work closely with our managers and their representatives during this difficult period, including supporting them as they transition into the next stage in their careers."

Full year results saw profits come in at £275 million, from £398 million the year before. The company will not pay a dividend this year or next.

Royal Mail also warned it could take a revenues hit of up to £600 million for the year ahead if Britain suffers a deep and longer lasting recession caused by the pandemic – a scenario where GDP falls by 15% across 2020-21.

Royal Mail added that executives will forgo annual bonuses for 2020.

There have been calls by some asset managers to break up the Group. At the moment Royal Mail has two arms, the UK Parcels, International and Letters division and General Logistics Systems (GLS) - a parcel delivery company based in Europe.

Williams admitted there are few synergies today between Royal Mail and GLS, but added that "in the medium term an international presence is clearly important, and the opportunity remains to create more value for shareholders."

Royal Mail is one of a raft of companies in the UK to announce hefty job losses due to the pandemic, including British Gas owner Centrica and airlines easyJet and British Airways.