The Royal Mail could see the loss of up to 50,000 jobs if ministers back recommendations calling for the partial privatisation of the state-owned organisation.
Former deputy chairman of Ofcom, Richard Hooper, presented his recommendations in a report to ministers last week and it is being discussed by the Cabinet this morning (December 16).
While official details of the report are yet to be released, it is understood part of the sweeping changes include the closure of half of Royal Mail’s 71 mail centres, which could lead to job losses of 50,000, out of its 170,000 strong workforce.
Hooper’s report is expected to highlight Royal Mail’s market is facing a rapid decline owing to the growth of services online and a contraction in business post as a result of the credit crunch.
The report also says that taxpayers will end up paying for a £7bn “black hole” in its £22m pension scheme. It is also expected to warn that mail volumes could fall by as much as 7% every year.
It has been reported that TNT, owned by Dutch company TPG, and the parcel courier for Deutsche Post, DHL, as the potential bidders for a stake in Royal Mail, which could see between a third and a half of the group privatised.