The International Distributions Services PLC (LON: IDS) share price is down 0.74% for the year but could be headed lower as the parcels, and mail delivery company continues to lose about £1 million daily due to the standoff with the Communication Workers Union (CWU).
YOUR CAPITAL IS AT RISK. 76% OF RETAIL CFD ACCOUNTS LOSE MONEY.
The CWU has said that the ongoing talks with the company are not progressing towards an agreement as Royal Mial sticks to its final and best offer of a 9% staggered pay increase over 18 months. As a result, the CWU plans to poll its members about further industrial action this year.
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YOUR CAPITAL IS AT RISK. 76% OF RETAIL CFD ACCOUNTS LOSE MONEY
Negotiations between Royal Mail and the CWU restarted on Monday, 9 January 2023, and are scheduled to end tomorrow, Friday, 20 January 2023. With the two sides unlikely to reach an agreement, the CWU will poll its members starting on 23 February 2023 on holding further strikes over the next six months.
Royal Mail’s CEO, Simon Thompson, has said that the current situation is untenable since the company cannot operate at a loss forever. He said the firm needs to cut at least 10,000 jobs by August this year. However, he has come under intense scrutiny about his bloated salary and bonuses when the company is in such dire straits.
Dave Ward, the CWU general secretary, has expressed concern that at the current rate, Royal Mail may have to cut more jobs than the projected 10,000, which puts a significant number of his members at risk of losing their livelihoods.
The hardline stance taken by Royal Mail seems unnecessary as the company needs to make a deal with the CWU to avert more strike action this year and start rebuilding the firm in the highly competitive parcels market where nimbler competitors have won some of its market share.
Investors will be watching closely to see what both sides say after the ongoing talk end tomorrow. However, the possibility of a deal appears low at this time. Simon Thompson’s tenure as Royal Mail CEO may end if the CWU strikes continue, given the widespread criticism of his salary and bonus package and perceived insensitivity to his workers' plight.
*This is not investment advice.
The Royal Mail (IDS) share price.
The Royal Mail (IDS) share price is trading down 0.74% for the year and could be headed lower.
YOUR CAPITAL IS AT RISK. 76% OF RETAIL CFD ACCOUNTS LOSE MONEY.