The Post Office is to close 115 loss-making branches and cut hundreds of jobs
THE Post Office is to close 115 loss-making branches and cut hundreds of jobs.
The company is preparing to announce significant cuts to its 3,000 directly employed staff in its head office and 115 big city centre Crown Post Offices, The Sun understands.
Post Office chairman, Nigel Railton, has scheduled a meeting at 9am with postmasters and Post Office staff to detail his turnaround plans.
It is understood that the Post Office is to switch to a franchise model.
Franchising is a business model where a company (the franchisor) grants permission to an individual or group (the franchisee) to operate a business using its brand, products, and processes in exchange for a fee.
But it is expected that the number of postmasters will remain the same.
A postmaster is the person in charge of a post office.
It is not yet known which Post Office branches will be affected.
The Post Office said it does not have plans to reduce the number of its roughly 8,500 branches, which are run by independent postmasters and local businesses.
It also has 2,000 Post Offices run by retailers including WHSmith and the Co-op, not Post Office staff.
The Post Office said that it “did not recognise” earlier reports that suggested that two thirds of postmasters could lose their jobs.
The Post Office insisted that cost savings would be used to boost pay for postmasters and invest in more automation, including note counting machine and self-scanning tills.
A spokesman said: “We will set out a ‘New Deal’ for postmasters and the future of the Post Office as an organisation.
“It will dramatically increase postmasters’ share of revenues, strengthen our branch network and make it work better for local communities, independent postmasters and our partners who own and operate branches.”
The number of Post Offices run across the UK has massively dwindled since the 1960s, when around 25,000 were in operation.
This is in part because more people started to receive benefits and pensions directly into their bank accounts, so needed the Post Office’s services less.
Post Offices also used to be the only places where you could buy postage stamps but you can now pick them up from supermarkets and petrol stations.
Martin Quinn from Campaign for Cash said: “This is another nail in the coffin for communities who rely on the Post Office network for access to cash services”
“The Government must immediately demand that this closure programme be stopped, and treat the Post Office network as national infrastructure.”
The number of branches in operation across the UK has remained around the 11,500 mark over the last decade.
The 364-year-old institution remains wholly owned by the state and is Britain’s biggest retail network.
Troubled times
It comes after it was revealed that government ministers are exploring plans to transfer ownership to employees, similar to the model used by the John Lewis Partnership.
It is based on the idea that its workers are each part-owners of the company and receive a share of annual profits.
Whitehall insiders admitted that the Post Office is in a lot of trouble and is only financially viable because of an annual subsidy it receives from the government.
Calls for a review of the company’s ownership model have grown amid rising public anger at the wrongful conviction of hundreds of sub-postmasters.
Highlighted by the ITV drama Mr Bates vs The Post Office, it has been labelled Britain’s biggest miscarriage of justice after they were accused of stealing cash from their branches.
Many had their lives destroyed, were imprisoned, and some even passed away or committed suicide before finally being exonerated.
Former sub-postmaster Sir Alan Bates, who tirelessly campaigned for justice, is still to agree a compensation settlement and has called on the government to consider suing former directors of the company.
At the same time, customers have been hit with continually rising stamp prices.
The price of first-class stamps rose by 30p to £1.65 in October – the second rise in a year.
It comes after first class stamp prices increased by 10p to £1.35 in April and by 10p to 85p for second class.
The company has frozen the cost of second class stamps at 85p until 2029 in a bid to keep the sending of letters affordable.
Royal Mail says it has tried to keep price increases as low as possible in the face of declining letter volumes, and inflationary pressures.
Why are retailers closing shops?
EMPTY shops have become an eyesore on many British high streets and are often symbolic of a town centre’s decline.
The Sun’s business editor Ashley Armstrong explains why so many retailers are shutting their doors.
In many cases, retailers are shutting stores because they are no longer the money-makers they once were because of the rise of online shopping.
Falling store sales and rising staff costs have made it even more expensive for shops to stay open. In some cases, retailers are shutting a store and reopening a new shop at the other end of a high street to reflect how a town has changed.
The problem is that when a big shop closes, footfall falls across the local high street, which puts more shops at risk of closing.
Retail parks are increasingly popular with shoppers, who want to be able to get easy, free parking at a time when local councils have hiked parking charges in towns.
Many retailers including Next and Marks & Spencer have been shutting stores on the high street and taking bigger stores in better-performing retail parks instead.
Boss Stuart Machin recently said that when it relocated a tired store in Chesterfield to a new big store in a retail park half a mile away, its sales in the area rose by 103 per cent.
In some cases, stores have been shut when a retailer goes bust, as in the case of Wilko, Debenhams Topshop, Dorothy Perkins and Paperchase to name a few.
What’s increasingly common is when a chain goes bust a rival retailer or private equity firm snaps up the intellectual property rights so they can own the brand and sell it online.
They may go on to open a handful of stores if there is customer demand, but there are rarely ever as many stores or in the same places.
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