UNEMPLOYMENT / OCT. 10, 2013
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The Cost of Royal Mail’s Privatisation Will Involve Job Losses

The fears of unions and employees regarding Royal Mail’s sell-off have been confirmed. The 500-year-old national institution has warned that more postal workers will see their jobs lost after the controversial privatisation. The Royal Mail announced clearly that the company will employ fewer people in the future whoever the owner is. It is yet unclear how many of the company’s 150,000 workers will be sacked.  

Why job cuts are inevitable

The expected cuts emerge on top of 50,000 jobs lost over the past decade. But, inevitably, the organisation must proceed with these measures to increase its efficiency and competitiveness.

The new conditions recently emerged in the postal services sector, following the liberalisation of the market and the increased competition, compelled Royal Mail to adjust accordingly.  Moya Greene, Royal Mail’s chief executive stated that "All of this has meant a difficult process of change for our people. Many of Royal Mail's employees have seen changes to their working practices as the company has adapted its operations to the changed mix of mail. Change will continue and the company will employ fewer people in the future, whoever owns it."

How workers react to the job cut plan

The Royal Mail employees who in their overwhelming majority (96%) oppose to the privatisation, believe that the company is still profitable and can continue to thrive in the public sector. However, workers continue their campaign against the sell-off and respond with a protest outside parliament ahead of committee assembly. Activists dressed up as highway robbers held banners reading: “The Great British Royal Mail Robbery” showing their indignation towards the proposed plan.

On the other hand, from the government’s perspective, the organisation’s privatisation will secure the postal service’s effectiveness and future development, allowing the company to innovate, invest, enhance its services, win new business, deliver outstanding universal service, and continue to be a significant employer in the UK.

Share price rising

In the meantime, Royal Mail’s shares price has exceeded government’s expectations. According to the BBC, the company’s shares will be priced at 330 pence valuing the whole of Royal Mail at £3.3 millions following strong demand by investors.  Under the terms of the share sale, a 10% stake will be reserved for employees and 30% will be offered to private investors.

 

Well, the Royal Mail privatisation is a ‘flaming’ issue that is accompanied by conflicting arguments. On the one hand, the sell-off will safeguard the postal service’s viability but will this be at the expense of the labour force? What do you think of the new plan and the impact it will have on workers? Please comment below.

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