Royal Mail Downgrades FY 2022 Guidance on Plan to Cut Around 700 Manager Jobs -- Update

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https://www.marketwatch.com/story/royal ... 1643099922

Royal Mail PLC said Tuesday that it plans to cut 700 manager jobs, and that it is reducing its guidance for fiscal 2022 because of the launch of a consultation process for its restructuring.

The British letter-and-parcel courier said that on a year-to-date basis, it has spent more than 340 million pounds ($458.7 million) on overtime, additional temporary staffing and sick pay during the coronavirus pandemic, which has been a headwind to delivering its productivity targets.

Royal Mail said it will incur a charge of GBP70 million for the restructuring of the company.

The company lowered its full-year outlook, and now expects an adjusted operating profit of around GBP430 million for the year ending March compared with previous guidance of GBP500 million.

"We are engaging with our unions on the proposals, which we expect will...deliver an annualized benefit of around GBP40 million, with around GBP30 million in FY 2022-23," it said.

Regarding its third-quarter performance, the FTSE 100-listed company said domestic parcel revenue fell by 4.9% on year, with group revenue falling to GBP3.55 billion from GBP3.64 billion for the same period a year earlier.

Royal Mail continues to expect month-on-month fluctuations in parcel volumes, it said. The company said it is suffering from cost headwinds in both its European and North American businesses due to higher inflation rates and a limited pool of available line-haul and delivery drivers.

"Measures to protect margin through pricing initiatives and improved efficiency are being implemented," it said.