Axe looms for 30,000 Post Office jobs

UP TO 30,000 Post Office workers could lose their jobs as the firm takes dramatic cost-cutting measures. The company, now called Consignia, needs to save £1.2bn to tackle a financial crisis.

Shocked union leaders condemned the size of the cuts and have not ruled out strikes. They had believed only 15,000 jobs were at risk but chief executive John Roberts has warned twice as many could go.

He told the House of Commons Trade and Industry Select Committee: 'We haven't finalised numbers. We could be looking at anything up to 30,000 redundancies.'

Already this year Consignia has announced a reduction of about 10,000 managers positions. Many of the staff affected will be moved to other posts.

The company aims to cut costs by 15% by March 2003 in order to stay profitable. The wages bill for about 200,000 staff account for 60% of its outgoings. As many as one in ten could go in some departments.

It is hoped the bulk of the cuts will be through natural wastage, voluntary redundancies and contracting out activities like cleaning and catering. Many parcel routes are to be franchised out - often to Parcelforce workers, said Roberts.

John Keggie, deputy general secretary of the Communication Workers' Union, said the scale of the cuts was 'completely unreasonable'. He warned: 'Any suggestion of compulsory redundancies will lead to appropriate industrial action.' A strike over shift patterns earlier this year left millions of letters undelivered.

A spokesman for the consumer watchdog Postwatch said: 'Just two weeks before Christmas, to blurt it out like this, is not very clever. They do not seem to have a proper plan.'

Consignia has been hit by tumbling profits and lost £281m in the first six months of this year. It mainly blames the economic climate and rail chaos since the Hatfield crash. But the cost of installing post office computers, Parcelforce's losses and the autumn decision not to increase stamp prices along with losing business to text messaging and e-mail have all contributed.

Roberts said money might also be saved by transferring mail from trains on to road and air transport. Cutting costs by £1.2bn would bring Consignia in line with its international competitors, he told the committee.

However, asked whether the company's financial difficulties indicated that the semi-privatised status it won earlier this year was not working, Roberts said: 'It is too soon to say, after just 12 months. I do have concerns, but I would have thought we have to give it another 12 months.'