Royal Mail (IDS) Shares Are Stuck in a Range Despite CWU Strikes

The Royal Mail share price, now known as International Distributions Services PLC (LON: IDS), has been trading sideways despite the ongoing strikes announced by the Communication Workers Union (CWU) scheduled for today and tomorrow.

Both sides blame the other for the lack of progress in negotiations after Royal Mail quickly rejected a recent offer by the CWU to call off the industrial action planned for today and tomorrow, saying that the offer was a repackaging of previous offers.

WELCOME BONUS - Free Share Bundle When You Invest £50! Get up to £500 cashback for investing with IG.

Invest in 15,000+ shares and ETFs. Open an account now, invest at least £50, and you’ll get a free share bundle worth between £40 and £200. T&Cs apply.

5.0

Open Account Spread bets and CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 68% of retail investor accounts lose money when trading spread bets and CFDs with this provider. You should consider whether you understand how spread bets and CFDs work, and whether you can afford to take the high risk of losing your money.

Royal Mail is keen to change its working relationship with the CWU, saying that the current terms between the company and the workers union are unsustainable in the current market where competition from nimbler companies continues to grab market share. 

In a letter to Royal Mail workers, the company’s CEO, Simon Thompson, warned that it is now fighting for its life since there will be no help from the government or the regulators since the company was privatised in 2013.

Royal Mail has said that its last pay offer to the CWU, which included a 9% pay rise staggered over 18 months on condition that workers work later hours by starting their deliveries late and ending them later than usual.

The company also wants to implement further changes that will make it more competitive among its peers, which the CWU oppose saying that the CEO wants to turn Royal Mail into a gig-economy company eroding its reputation as a respectable employer. 

The CWU has promised more industrial action in 2023 if Royal Mail does not bow to their demands, but it appears the company is ready to force its changes through, given its latest decision to reject the CWU’s pay offer.

Royal Mail has the legal grounds to implement changes regarding how its employees work after the CWU’s industrial action crossed the 12-day threshold that allows Royal Mail to make unilateral changes to protect the business. 

As the industrial action for 2022 ends tomorrow, we will likely see the pay dispute continue into next year unless both sides are willing to compromise.

Royal Mail (IDS) shares have been trading sideways for the past few days as markets price in the impact of the strike action.

*This is not investment advice. 

Royal Mail (IDS) share price.

The Royal Mail (IDS) share price has been trading sideways for the past ten days since 12 December 2022.