Threat of strikes after Consignia announces it will cut 15,000 jobs
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The state-owned postal group Consignia announced 15,000 job losses amid fresh warnings last night by senior managers of even more cuts and a threat of national strikes by union leaders.
John Roberts, Consignia's chief executive, warned MPs that thousands of jobs could be lost on top of those already confirmed if the postal regulator moved too quickly to introduce unfettered competition.
Mr Roberts said a rush to liberalise the industry could put universal deliveries at risk and cost Consignia up to £750m, forcing even more job cuts.
He called for more time to allow Consignia to adjust to the rigours of competition.
"My concern is once you let the genie out of this particular bottle you can't put it back in again," he told the Public Accounts Committee.
"If the judgement about how far and how best to attack our core business is wrong we would be in severe difficulties fairly quickly."
Mr Roberts asked: "Do we want a Consignia which is highly damaged, which it might be, or do we want something which introduces competition and liberalisation in the market in a way which leaves us relatively healthy?"
Bill Hayes, general secretary of the Communication Workers' Union, said his members would take industrial action if management failed to stick to assurances that workers would not be made compulsorily redundant. Mr Hayes, leader of 180,000 postal workers, said that if the regulator allowed a 1p increase in the price of a stamp it would save thousands of jobs and maintain services.
Allan Leighton, who was confirmed as permanent chair-man of the Consignia group yesterday, took a similar line.
"You cannot get away from basic maths," he said. "The cost of a first-class stamp has risen by one penny in five years and a second-class stamp is down by a penny.
"If revenue is not keeping up with costs then you have a problem and we have a problem." But he said "in-fighting" among managers, staff and unions was also one of the causes of Consignia's "perilous position".
The announcement was part of a three-year programme, aimed at stemming losses of £1.5m a day. The plan, aimed at cutting costs by a total of £1.2bn, is expected to mean 30,000 redundancies with a further 10,000 on top of that leaving through natural wastage.
More than 6,700 of the job losses announced yesterday are to go in the Parcelforce subsidiary with the closure of 50 depots throughout Britain.
Another 2,500 employees will leave the transport division where four mail distribution centres will close. There are further job losses in management grades. The cutbacks will save £460m and will mean that Parcelforce can concentrate on next-day and two-day deliveries. The number of depots which handle three-day deliveries will fall from 101 to 51, reducing Parcelforce's staff from 11,700 to around 5,000.
The programme will mean more mail will be moved by rail, although the group will no longer use "travelling post offices" – trains with sorting facilities. Mail distribution centres at Swindon, Chelmsford, Plymouth and Cardiff will close, while a new Midlands distribution complex is to be built to take on the work.
Management said it hoped that in the case of 13,000 out of the 15,000 job losses announced yesterday the individuals concerned would switch to other jobs within the group. The remaining 2,000 are expected to go through natural wastage.
Postwatch, the consumer postal services watchdog, called on Consignia not to cut services in its bid to slash costs. Gregor McGregor, the pressure group's chief executive, said Consignia's three-year plan should also tackle Royal Mail and end worrying speculation about job losses.
Mr McGregor said: "Consignia can cut costs but it must not cut services. Service standards have to be improved over the three years of this plan and Consignia should publicly commit to doing so."
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