U.K. Postal Service to Lay Off 15,000

Consignia, the U.K. postal service, will cut 15,000 jobs over the next three years, to cut costs in an atmosphere of growing competition and staggering budget deficits. This move comes while Consignia is still involved in settling a pay dispute with the Communications Workers Union, which represents more than 145,000 Royal Mail postal workers. Royal Mail is the letter-delivery unit. Consignia will lay off about 15,000 workers from its Parcelforce unit as well as those that handle railroad mail delivery. Some information-technology and call center operators will also be cut, said Consignia spokeswoman Christina Gregory. Parcelforce delivers parcels express. Consignia, the privatized British postal service, expects to save more than 1.2 billion pounds sterling over the next three years ($1.8 billion) from these actions, and "provide a secure long-term foundation for the company and for universal postal services in the U.K," according to the company. Consignia chairman Allan Leighton said in a statement that Consignia is in a perilous position, and is losing more than $1.8 million a day. Beginning in July, Parcelforce Worldwide will focus exclusively on time-guaranteed and next-day and two-day express deliveries. It will also cease its declining and unprofitable portfolio of three-day-plus delivery products. Consignia will transfer its regular (non-express) parcel service to Royal Mail, which will use its existing network to deliver parcels to every U.K. address. Four of the 16 current mail-distribution centers will close in the next year. Consignia said it has begun formal consultations with the affected trade unions. In the meantime, the Communications Workers Union, which represents about 145,000 workers for Royal Mail, the post office arm of Consignia, has set March 27 for a possible strike. The union accused Consignia of reneging on an agreement for a 6.9% pay rise agreed to early this month (DIRECT Newsline, March 14). Gregory said yesterday's announcement does not directly affect Royal Mail workers but admit that many Parcelforce workers also belong to the CWU.