Parcelforce faces a 'substantial loss'
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• Parcelforce is expected to report a "substantial loss" when its first-year results are released in July, despite an anticipated £.600m turnover.
It blames the Royal Mail for hiving off the letters accounts which cost it £60m in lost revenue — the equivalent of 1.5% of the £4bn the Royal Mail makes annually on letters.
Parcelforce plans to combat the loss by cutting 550 administrative jobs — by natural wastage and voluntary redundancy if possible — and moving to a centralised administration system.
Parcels Standard Service prices are set to rise by an average 25.9% — a lkg parcel will go up from £2 to £2.50.
The Post Office accounts are not published until 9 July, but Parcelforce says that the stringent measures are a "a first step" to "converting a substantial loss to break even".
The company admits that it has been battling against the recession, but says: "The streamlining of our business is targeted to achieve a very rapid return to profitability."
Parcelforce says that its service will not suffer as a result of the cuts.