Royal Mail Says to Cut 1,600 Jobs

Britain's main postal operator Royal Mail on Tuesday said it planned to axe 1,600 jobs under a fresh cost-cutting drive six months after the group was partly privatized.

Royal Mail said in a statement that most of the jobs to go would be in management, with no delivery staff losing their positions. It added that it would create "300 new or enhanced roles", resulting in a net loss of 1,300 jobs.

The changes are expected to deliver annualized cost savings of around £50 million ($82.5 million, 60 million euros), it said.

Royal Mail chief executive Moya Greene said the cuts were necessary for the company "to effectively compete in the letters and parcels markets".

Britain's coalition government last year sold off more than half of Royal Mail but has since been accused by opposition lawmakers of selling the company too cheaply after its shares spiked after the flotation.

The privatization formed part of the coalition's drive to slash Britain's budget deficit. Opposing the change in ownership, union bosses argue that customers are now receiving a worse service.

The government has long argued that partial privatization will allow Royal Mail the freedom to raise capital, continue modernizing and meet booming demand for online shopping that generates parcel traffic.