Royal Mail has requested the government for permission to stop delivering letters on Saturdays to reverse its fortunes after suffering a deficit in the first half of the year.
The company wished to reduce the number of delivery days from six to five, from Monday through Friday exclusively.
However, parcel delivery services would continue to operate seven days each week.
Royal Mail reported an underlying operating loss of £219 million for the six months ending September 25.
In the next weeks, additional walkouts are anticipated, which weighed significantly on the company.
Keith Williams, non-executive chair of International Distributions Services (IDS), the owner of Royal Mail, stated that “urgent reform” was required to secure a sustainable future.
“The government has been asked to expedite the transition to five-day letter delivery while we continue to enhance our parcel services,” he said.
Royal Mail’s chief executive officer, Simon Thompson, stated, “We have always been adamant that we must transform to survive.
We have begun turning around the business and will do whatever it takes.
He continued, “We would prefer to strike an agreement with the Communication Workers Union (CWU), but we are moving forward with transforming our business anyway.”
The CWU and Royal Mail have been engaged in a protracted dispute over salary, employment, and working conditions.
In recent weeks, several strikes have occurred, and they will return on Black Friday and Cyber Monday.
Matt Britzman, an equity analyst at Hargreaves Lansdown, remarked, “Battles with unions over wages are never beneficial for business, and when they result in strike action, they have a significant impact on performance.”
This is precisely the case with Royal Mail since profits have vanished and previous strikes have cost the company over £100 million.
Mr. Britzman stated that while negotiations over salary continue, Royal Mail management has begun examining methods to remedy poor performance.
Costs will come into “laser-sharp focus,” he warned, as Royal Mail has already announced plans to eliminate 10,000 positions by August of next year.
“Other initiatives include a request to the government to examine the expectations for weekend letter delivery, with Royal Mail requesting a five-day letter delivery week to cut costs,” he added.
IDS reported a pre-tax loss of £127 million for the first half of the year, due to Royal Mail’s negative impact on the group’s overall performance.
This year, the corporation was renamed from Royal Mail Group to include the worldwide package service GLS.
