Royal Mail plans up to 2,500 job cuts by end of 2027

What happened

Royal Mail plans to remove up to 2,500 jobs by the end of 2027, targeting the administrative and support operations behind its national delivery network rather than postal workers on their rounds.

The proposals cover head office and other supporting functions. Royal Mail employs more than 131,000 people, putting the planned reduction at just under 2% of its workforce. Operational posts in processing and delivery, including drivers, are outside the restructuring.

The company intends to reduce staffing through voluntary redundancy and employees leaving through the normal course of business. It says compulsory redundancies will not be needed. This approach combines an organised voluntary departure programme with reductions as existing staff move on.

Formal consultation is under way with the Communication Workers Union and Unite CMA. The CWU says around 200 posts held by its members are affected, including jobs in administration and revenue protection.

The review forms part of a wider effort to change how Royal Mail operates as demand shifts away from letters and towards parcels. Management wants to streamline internal processes and reduce overlapping responsibilities, arguing that this will create room for further investment in customer services.

The background

The cuts are the first since Czech billionaire Daniel Kretinsky’s EP Group completed its £3.6bn acquisition of International Distribution Services, Royal Mail’s parent company, last year. Shareholders approved the takeover at the end of April 2025.

Royal Mail’s previous large-scale reduction was announced in 2022, when it sought to eliminate as many as 10,000 roles. That plan included 6,000 full-time frontline jobs, unlike the current proposals, which are confined to head office and support work.

The underlying pressure on the letters business has been building for years. Volumes are more than 70% below their peak in the mid-2000s, as digital communication replaces much of the correspondence previously carried through the postal network.

The most recent annual decline was 10%, taking letter volumes to 5.7 billion. At the same time, Royal Mail faces growing demand for quicker and more convenient parcel deliveries in a competitive market.

A shrinking letters business does not mean an equivalent reduction in the network it must serve. Over a decade, the number of delivery addresses has increased by four million, leaving the company serving more destinations while handling substantially fewer letters.

Higher employment costs have also weighed on the UK business. Its profit fell to £96m in the year ending in March, compared with £198m over the preceding 12 months — a reduction of £102m, or slightly more than half.

Royal Mail has long argued that its universal service obligation needs to change. That legal framework underpins nationwide letter delivery, rather than allowing the operator to concentrate solely on routes where deliveries are easiest or most profitable.

In July last year, Ofcom authorised changes to second-class deliveries, permitting an alternate-weekday service from Monday to Friday and ending the Saturday requirement. Royal Mail is implementing those reforms alongside its wider organisational changes. Kretinsky has previously committed to maintaining nationwide letter deliveries six days a week while he runs the service.

Delivery performance and prices

The restructuring comes during prolonged scrutiny of service standards. Since 2023, Ofcom has imposed fines totalling £37m on Royal Mail for failing to achieve its delivery targets.

The company has not met the regulator’s annual first-class delivery target since 2017. For second-class post, the last year in which it achieved the required standard was 2020.

In the year ending in March, just over three-quarters of first-class letters arrived on time, against a target of 93%. Ofcom opened a further investigation in June after the company again missed its annual requirements.

Figures for the first three months of 2026-27 showed better performance, but both principal letter services remained below their targets. Within that period, 85% of first-class letters arrived within a day, compared with the applicable 90% requirement. For second class, 91% arrived within three days, against 95%.

Customers have also faced higher postage costs. In April, the price of a first-class stamp increased by 10p to £1.80, a rise of about 6%. That left it costing more than twice as much as in 2020.

Second-class stamps rose by 4p to 91p, an increase of about 5%. Royal Mail attributed the price changes to the increasing cost of delivering each individual letter as the number being sent falls.

What people are saying

Chief executive Alistair Cochrane has presented the proposed cuts as a way to make Royal Mail more competitive. He said management had been seeking savings throughout the business and wanted a less complicated organisation better able to invest in its service.

Cochrane acknowledged the difficulty the changes would create for employees. He committed the company to fair treatment throughout the process and to working with its trade unions as the proposals are considered.

The CWU takes a sharply different view of the company’s position. Deputy general secretary Martin Walsh said the announcement reinforced the union’s concerns about staff morale and failures affecting customers and communities. He called on the government to intervene to protect Royal Mail.

Political concern extends beyond the workforce changes. More than 100 MPs have written this year to Ofcom and the business secretary seeking action over constituents’ complaints about postal services. Royal Mail has faced sustained criticism from politicians and members of the public over delayed letters.

What happens next

Union discussions will examine the proposed staffing changes before their planned completion at the end of 2027. Walsh said the CWU would meet management about the announcement, bringing the effect on its administration and revenue protection members into those discussions.

The employment review sits alongside a service improvement plan under which Royal Mail says it will invest £500m over five years. Days before announcing the cuts, Cochrane apologised for poor performance and said the wider transformation would reach most areas before Christmas.

Separately, Royal Mail announced last week that it would recruit 22,000 temporary staff for the seasonal surge. Those jobs cover sorting, delivery, collection and driving heavy and medium goods vehicles, rather than the head office functions facing reductions.

That recruitment is intended to support the increased workload generated by Black Friday and Cyber Monday shopping in November, followed by Christmas deliveries. It addresses a short-term operational peak while the support-role restructuring runs over a longer period.

Why this matters

For UK households and businesses, the service figures measure two different needs: next-day first-class delivery and second-class delivery within three days. They are performance targets, not a promise that every item will arrive within that period — an important distinction for time-sensitive correspondence.

The announcement concerns Royal Mail, not the Post Office, which is a separate organisation. It therefore centres on the company carrying letters and parcels, rather than a restructuring of the Post Office branch network used by many customers to send them.