Royal Mail expected to reveal cost savings amid job cuts

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Royal Mail expected to reveal cost savings amid job cuts

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Earlier this year, the company announced plans to axe 700 management jobs in a bid to reduce costs by about £40 million a year.

The City will be looking out for signs that Royal Mail has made significant cost savings following substantial job cuts when it updates the market next week.

Earlier this year, the company announced plans to axe 700 management jobs in a bid to reduce costs by about £40 million a year after experiencing a dip in revenue following the Covid delivery boom.

Analysts expect adjusted operating profits from the full year to May 6 to be £771 million, up from £702 million reported the previous year, when it publishes its full-year financial results on Thursday 19 May.

Shareholders will be hoping the results show evidence of its money-saving efforts in the balance sheets, as well any signs it can offset the impact of inflation driving up operation costs.

It comes amid concerns the rising cost of living could lead to a reduction in consumer spending, so investors will be cautious they could see parcel volumes take a hit.

Analysts warn Royal Mail’s pandemic success may be overshadowed by recent cuts and pressure to keep wages up in line with rising prices.

Laura Hoy, an analyst at Hargreaves Lansdown, said: “Royal Mail’s in a tricky position heading into its results.

“The group’s been delivering on an impressive turnaround that’s seen a shift toward automation and efficiency, which was only helped along by the pandemic.

“Now that those tailwinds have dissipated, much of the transition involves cutting costs, and Royal Mail’s biggest cost is its massive network of employees.”

Ms Hoy added that investors will be looking to see that the group is on track with its planned investment into automation and that spending is not getting out of hand.

“Management forecast well over £400 million of investment costs at the half year. With inflation driving up construction costs, we’re keen to know exactly what that means.

“We’ll also have an eye on parcel volumes, which have come down somewhat from pandemic highs. They appear to be rebasing at a higher level, though, a trend we’d like to see solidified at the full-year results.”

Postal workers went on strike earlier this month in a dispute over pay. POSTMAN EDIT:Twas the Post Office
Bosses at the Communication Workers Union (CWU) said the strike was over a pay freeze for 2021 and the offer to increase pay 2% this year and give them a £250 one-off lump sum.
I Wrote
It's good to get these types of threads, the ridiculous my manager said bollox so we can reassure ourselves that while the world is falling apart, Royal Mail managers are still being the low life ***** they have always been.
RM Coronavirus Support
A manager does not have to count such absences (Covid) towards an attendance review, so my advice would be that employees who remain absent in order to protect the health of their colleagues continue to raise this as mitigation as part of the attendance procedure.
Workplace - The gift that keeps on giving.
My BFF Clash
The daily grind of having to argue your case with an intellectual pigmy of a line manager is physically and emotionally draining.
Simon Thompson
Royal Mail " 505th Christmas - still learning…!"
team - tell the truth - be respectful - be open to other points of view - if you are doing these three things, post post post post…
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