Royal Mail warns strikes will put jobs at risk as walkouts cost up to £80m

Royal Mail warns strikes will put jobs at risk as walkouts cost up to £80m
Royal Mail warns strikes will put jobs at risk as walkouts cost up to £80m

Royal Mail has warned upcoming strikes will put jobs at risk and push it to a loss, with four days of disruption set to cost it as much as £80m.

The company said planned industrial action by the Communication Workers’ Union (CWU) later this month and next will make its UK business “materially loss making”.

It had previously said the business would break even this year.

The CWU’s 115,000 members are poised to strike on August 26, August 31, September 8 and September 9 following a row over pay and working conditions.

With most of Royal Mail’s 140,000 staff affected, the walkouts are expected to cripple the postal service and result in the majority of post going undelivered.

Analysis by The Telegraph suggests the cost of the strikes could be as much as £20m per day. A Royal Mail spokesman declined to comment on the figure.

In an update to investors, the company said it remained open to talks with unions but only if they are prepared to discuss productivity improvements.

At present, Royal Mail says it is losing £1m per day. This would rise to £1.5m per day if a proposed 5.5pc pay increase for workers goes through without “meaningful” savings elsewhere.

Royal Mail called on the CWU to face the “reality of the situation”, adding: “The negative commercial impact of any strike action will only make pay rises less affordable and could put jobs at risk.”

The CWU said Royal Mail's position was “beyond laughable” after the company made a £758m profit last year.

The union also highlighted that £400m was returned to shareholders and executives earned £2m in bonuses.

“There is plenty of money in Royal Mail,” a CWU spokesman added. “It’s just in the pockets of the wrong people.”

Over the six months from April 2021, the company had average revenues of £22m per day. That suggests strike action could cost the company about £80m.

However, those first-half figures benefited from a boom in parcels during the pandemic as consumers spurned high streets in favour of shopping online. In the first quarter of this year, the company said parcel volumes had fallen 15pc compared with 2021.