# Royal Mail says UK business losing one million pounds a day amid union clash
Author:  Pal Sinha, Barnali 
Author URL: https://financedigest.com/author/pal-sinha-barnali
Published: 2022-07-20
Category: NEWS
Category URL: https://financedigest.com/category/news
Meta Title: Royal Mail losing £1m a day amid cost cut struggle
Meta Description: Struggling with costs and declining business, Royal Mail is losing £1 million a day as postal workers threaten strikes amidst a turbulent market.
URL: https://financedigest.com/royal-mail-says-uk-business-losing-one-million-pounds-a-day-amid-union-clashhtml

![undefined](https://prod.superblogcdn.com/site_cuid_cm5qst7v3003gwirgwqtxn8i8/images/2022-07-20t064517z3lynxmpei6j06urtroptp4royal-mail-outlook-1736815559753-compressed.jpg)

By Eva Mathews and Yadarisa Shabong

(Reuters) – Royal Mail is losing one million pounds a day, the British post and parcel delivery firm said on Wednesday, as it struggles to cut costs as inflation-hit consumers cut back on online shopping and postal workers threaten to strike.

While the pandemic led to an unexpected boom in parcel delivery that bolstered profit and helped the company pay out around 400 million pounds to shareholders, it was already facing a sliding UK letters business and stiff union opposition to transformation plans.

The centuries-old firm renamed its holding company International Distributions Services and said it would [consider splitting its UK business](https://www.financedigest.com/7-factors-to-consider-before-your-business-moves-to-a-subscription-model.html "7 Factors to Consider Before Your Business Moves to a Subscription Model") and overseas business GLS into two separate firms if no “significant operational change” is achieved.

Analysts said the potential split has been the [“elephant in the room”](https://www.financedigest.com/gdpr-and-cyber-security-the-elephant-herd-in-the-room.html "GDPR And Cyber Security: The Elephant Herd In The Room") and could be a tactic aimed at inching forward with the union, while GLS could struggle to go it alone.

The [pandemic boom](https://www.financedigest.com/uk-house-prices-end-2022-on-a-weaker-note-after-pandemic-boom.html "UK house prices end 2022 on a weaker note after pandemic boom") in parcel volumes bolstered by the delivery of (Covid) test kits and parcels is over,” Royal Mail Chairman Keith Williams said.

Royal Mail’s UK business lost 92 [million pounds](https://www.financedigest.com/britain-announces-205-million-pound-auction-for-renewable-power-projects.html "Britain announces 205 million pound auction for renewable power projects") ($110 million) in its first quarter to end-June on revenue that fell 11.5%. It expects to break-even for the year, excluding any [strike impact](https://www.financedigest.com/factbox-what-impact-will-strike-at-britains-busiest-container-port-have.html "Factbox-What impact will strike at Britain’s busiest container port have?").

Royal Mail’s largest labour union, CWU, said on Tuesday that more than 115,000 postal workers had voted to [strike over pay](https://www.financedigest.com/in-inflation-hit-germany-massive-strike-over-pay-to-cripple-transport.html "In inflation-hit Germany, massive strike over pay to cripple transport") as Britain faces its worst cost-of-living crisis in decades.

[Company executives said they were “absolutely](https://www.financedigest.com/the-last-mile-of-statutory-reporting-is-absolutely-crucial-heres-how-one-global-company-does-it-with-onesource.html "The last mile of statutory reporting is absolutely crucial. Here’s how one global company does it with ONESOURCE") ready” to discuss the issue.

Shares in [Royal Mail](https://www.financedigest.com/uks-royal-mail-workers-to-strike-in-run-up-to-christmas.html "UK’s Royal Mail workers to strike in run-up to Christmas"), which was privatised in 2013, fell about 2% to 279 pence by 1115 GMT, and were down around 45% so far this year.

Operating profit at Amsterdam-based GLS was 94 [million pounds](https://www.financedigest.com/uk-gives-bbc-world-service-20-million-pounds-to-support-english-language-broadcasting.html "UK gives BBC World Service 20 million pounds to support English language broadcasting") in the quarter, and revenue rose 7.8%.

A small fish in a big sea, GLS could find it difficult to compete with deeper-pocketed [competitors in the international logistics business.”](https://www.financedigest.com/challenger-banks-missing-golden-opportunity-to-steal-business-from-competitors-by-repeating-same-old-mistakes.html "Challenger Banks Missing Golden Opportunity To Steal Business From Competitors By Repeating Same Old Mistakes") Laura Hoy, an analyst at Hargreaves Lansdown, said.

($1 = 0.8329 pounds)

(Reporting by Eva Mathews and Yadarisa Shabong in Bengaluru; editing by Uttaresh.V, Elaine Hardcastle, Kirsten Donovan)


---
This blog is powered by Superblog. Visit https://superblog.ai to know more.
---