Union says Royal Mail plans to cut costs by a tenth

By Peter Griffiths

LONDON (Reuters) - Royal Mail bosses want to cut costs by a tenth to help cope with the threat posed by the recession and increased competition, a union said on Friday, citing leaked company documents.

The Communication Workers Union (CWU) revealed details of a management review which proposes cuts to working hours, staff numbers, vehicle costs and administration.

Like other postal services around the world, Royal Mail's business has been eroded by e-mail, the Internet and mobile phones. The recession has also eaten away at the amount of mail it delivers, particularly in the key advertising market.

"All teams have been given a 10 percent cash reduction target and so we need to focus not only on where we can deliver an excellent service with fewer roles, but also opportunities to spend less cash," the leaked document says, according to the CWU. "All costs are being reviewed, including staff, vehicle and administration costs."

With unemployment rising fast and Britain in recession, any job cuts could be politically damaging to Prime Minister Gordon Brown. He has fallen behind in the polls ahead of an election due by May 2010 and some surveys suggest voters are unhappy with his handling of the economic crisis.

Unemployment has reached nearly 2 million and there are signs of growing unrest among parts of the workforce. Thousands of energy workers walked out last month in a row over the use of foreign workers.

PANIC MEASURE

CWU Deputy General Secretary Dave Ward said the 10 percent savings target was a "panic measure."