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Royal Mail plans to cut 1,600 jobs Royal Mail plans to cut 1,600 jobs
(35 minutes later)
Royal Mail is planning to cut 1,600 roles as part of a drive to cut costs, mainly among its head office managerial staff.Royal Mail is planning to cut 1,600 roles as part of a drive to cut costs, mainly among its head office managerial staff.
The postal delivery service says the net effect will be 1,300 job losses, as it plans to create 300 new or enhanced roles at the same time.The postal delivery service says the net effect will be 1,300 job losses, as it plans to create 300 new or enhanced roles at the same time.
It says the cuts are part of its aim to make cost savings of £25m in 2014-15. It says the cuts are part of its aim to make cost savings of £50m a year.
Royal Mail said it would start consultations on the job cuts with unions Unite and CWU on Tuesday. Unite, a union which represents 7,000 Royal Mail managers, warned the cuts could spark industrial action.
Royal Mail said it would start consultations on the job cuts with both Unite and CWU on Tuesday.
It emphasised that the cuts would have "no impact" on frontline employees including postmen and women.It emphasised that the cuts would have "no impact" on frontline employees including postmen and women.
The company said it expected the job cuts to reduce costs by about £25m in 2014-15.
Union warningUnion warning
Royal Mail chief executive Moya Greene said the cuts were necessary for it to "effectively compete in the letters and parcels markets".Royal Mail chief executive Moya Greene said the cuts were necessary for it to "effectively compete in the letters and parcels markets".
Overall, Royal Mail said it expected to deliver annualised costs savings of about £50m from its efficiency programme.
The company, which floated on the London Stock Exchange last year, said 50,000 of its employees had left since 2003.The company, which floated on the London Stock Exchange last year, said 50,000 of its employees had left since 2003.
Unite, which represents 7,000 Royal Mail managers, warned the cuts could cause industrial action. The Unite union described Royal Mail's proposals as "ruthless".
"Royal Mail's primary reason for existing is now about making profits rather than serving the nation," said Brian Scott, Unite officer for Royal Mail."Royal Mail's primary reason for existing is now about making profits rather than serving the nation," said Brian Scott, Unite officer for Royal Mail.
"Unite is demanding a commitment to no compulsory redundancies on fair terms and an effective method for redeployment within the restructured organisation. If Royal Mail refuse we will have no alternative than to consider a ballot for industrial action.""Unite is demanding a commitment to no compulsory redundancies on fair terms and an effective method for redeployment within the restructured organisation. If Royal Mail refuse we will have no alternative than to consider a ballot for industrial action."
Royal Mail said making the cuts would cost it about £100m, taking its cumulative "transformation" costs for 2013-14 to £230m.Royal Mail said making the cuts would cost it about £100m, taking its cumulative "transformation" costs for 2013-14 to £230m.
It had originally expected transformation costs for the period to be £160m.It had originally expected transformation costs for the period to be £160m.
Despite the costs, it said it still planned to invest about £1.2bn into the business between 2013 and 2015.Despite the costs, it said it still planned to invest about £1.2bn into the business between 2013 and 2015.