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The company also announced the next stage of its programme to close about half its 64 mail centres within the next five years
Royal Mail has told workers that its employee share scheme will be virtually worthless when it matures next year, dashing hopes of a windfall for staff.
Having carried out a valuation of the scheme, new chief executive Moya Greene has blamed the group's financial position and lower than expected cost savings. The maximum payout would have been £3,000 but the scheme now seems unlikely to pay anything.
Former chairman Allan Leighton set up the share scheme along with former chief executive Adam Crozier in 2007 to give staff an incentive to boost productivity and compete with private sector rivals.
Dave Ward, deputy general secretary of the Communication Workers Union, said in a letter to members that the value of each worker's holdings in the scheme had fallen from around £1,400 in September 2010 - "to nothing".
Royal Mail also announced yesterday it is cutting 3,500 jobs as part of its ongoing cost cutting and modernisation programme. Royal Mail said it expected the latest job losses – it has cut the number of employees by about 65,000 since 2002, or more than a quarter – would be achieved by voluntary means and that compulsory redundancies would not be necessary.
The company also announced the next stage of its programme to close about half its 64 mail centres within the next five years. Some 751 jobs are expected to be cut in Greater London after it said two mail centres in the capital would be closed immediately. It will also begin consulting on reducing the number of line managers by up to 1,000. A further 1,700 people are leaving the group following a separate review of managers in its head office.
Royal Mail said that it had worked with the Communication Workers Union on the changes. Workers losing their jobs in London will be offered placements outside the capital.
The company added: "With people demonstrating reasonable flexibility, Royal Mail expects that everyone who wants to remain in the business will be able to do so."
Mark Higson, managing director of operations and modernisation, said: "Royal Mail's modernisation programme, which is vital to ensuring a successful future for the letters and parcels business, depends on having the right number of people in our business as well as deploying the right technology and equipment. We are conscious of the impact today's announcement will have on our staff in London. It is hard to reduce job numbers at any time; we are committed to doing everything we can, in line with our agreement with the union, to make these changes on a voluntary basis. We will be providing specialist outplacement advice to help our people affected by this announcement to look for new opportunities outside Royal Mail."
