Royal Mail expects full-year loss if strikes go ahead

Royal Mail said it would be “materially loss-making” for the financial year 2022-2023 if its employees go ahead with planned strike action.

More than 115,000 Royal Mail postal workers are set to strike for four days in a dispute over pay, with the Communication Workers Union (CWU), which represents the workers, announcing that 24-hour walkouts will happen on 26 and 31 August, and 8 and 9 September. 

The British postal service had negotiated with the CWU on salaries, and offered an unconditional increase of 2 per cent with an additional 3.5 per cent conditional on agreements to improve productivity. 

The CWU rejected this 5.5 per cent increase, which Royal Mail said would have added about £230m to the company’s annual costs “at a time when the business is already loss making.” 

Royal Mail said it was already losing £1m a day according to its trading update for the first quarter and the proposed pay deal would add over £500,000 pounds a day to that amount. 

The company announced £758m operating profit for the year ended March 2022.

The decision to strike came after last month’s ballot, which saw employees vote 97.6 per cent in favour of walking out on a 77 per cent turnout.

“Royal Mail remains ready to talk with the CWU to try and avert damaging industrial action and prevent significant inconvenience for customers. But any talks must be about both change and pay,” the postal service said. 

“Royal Mail has contingency plans in place and will be working hard to minimise disruption and restore normal service as soon as possible.”