Royal Mail has announced a £500 million recovery programme aimed at restoring its reputation for reliable deliveries, setting out a five-year plan that will reshape working practices across its nationwide network. The overhaul includes the gradual reduction of Saturday second-class deliveries from May and a major shift toward longer working hours for part-time postal workers.
The initiative is the first major operational restructuring under Czech billionaire Daniel Kretinsky, whose EP Group completed a £3.5 billion acquisition of Royal Mail’s parent company, International Distributions Services, last year. The deal took the UK postal operator private after more than a decade on the London Stock Exchange.
At the centre of the plan is a £100 million annual investment designed to create the equivalent of 3,000 full-time delivery roles. Royal Mail expects this to be achieved by encouraging around 6,000 part-time staff to increase their weekly hours to an average of 35. The company has secured agreement from trade unions, a notable development given the long history of industrial disputes within the organisation.
The scale of the challenge facing Royal Mail is reflected in its current performance. The company is meeting only 77% of its next-day first-class delivery target, well below the regulatory benchmark of 93%, meaning nearly one in four letters arrives late. Second-class mail is also under pressure, with 91% delivered within three days against a target of 98.5%.
Regulator Ofcom has already relaxed parts of the universal service obligation following the takeover. The updated framework allows for reduced delivery frequency for non-first-class mail and lower performance thresholds, setting new targets of 90% for first-class next-day delivery and 95% for second-class within three days. Royal Mail has stated it expects to meet these revised standards within a year of implementation.
The company has identified inefficiencies in delivery route completion as a key issue, with about 8% of rounds either understaffed or too large to finish within standard working hours. A restructuring of operations is planned across 1,200 delivery offices, with recruitment focused on areas including Oxford, Cambridge and London, where staffing shortages have been most severe.
Chief executive Alistair Cochrane acknowledged the organisation’s shortcomings, stating that service levels have fallen short of customer expectations. Daniel Kretinsky has also publicly apologised for delays in deliveries, describing the system as imperfect but not beyond repair.
Royal Mail employs around 130,000 staff, including 80,000 in frontline delivery roles. For many small businesses that depend on postal services for invoices and official documents, the effectiveness of the turnaround plan will be closely watched as the company attempts to stabilise one of the UK’s most historic public services.
