Consignia to cut up to 30,000 jobs

LONDON, England -- Consignia -- formerly the UK Post Office -- says it will cut up to 30,000 jobs over the next 18 months as part of a £1.2 billion savings package.

The cuts come on top of 10,000 trimmed from the organisation's 200,000-strong staff over the past year, chief executive John Roberts said.

Consignia hopes the bulk of the cuts can come through retirement, voluntary redundancies and outsourcing of contracts for activities like cleaning and catering, Roberts told a House of Commons committee.

Also, many parcel delivery routes are to be franchised out to cut costs, he said.

Consignia posted a record £281 million loss in the first six months of 2001. Operating losses quadrupled to £100 million.

The figure of 30,000 took union leaders by surprise.

John Keggie, deputy general secretary of the Communication Workers' Union, called the figure "completely unreasonable."

"Any suggestion of compulsory redundancies will lead to appropriate industrial action," he said.

Roberts blamed much of the company's declining profits on the uncertain economic climate and the costs and delays caused by chaos on the railways.

Total mail volume had grown by just 3 percent this year, compared with the predicted 6 percent, as advertisers cut back on junk mail. Consignia expected growth to continue at this slower rate over the next five years.