By Yadarisa Shabong
(Reuters) -Britain's Royal Mail (LON:IDSI) will do "whatever it takes" to turn around its business, its chief executive said on Thursday, as more postal strikes loom in the busy holiday period if the company fails to strike a deal with its largest labour union.
Royal Mail and the Communications Workers Union (CWU) which represents more than 115,000 of its postal workers, late on Wednesday extended talks aimed at averting strike action this Black Friday and in the run-up to Christmas.
"We have started turning Royal Mail around, and we will do whatever it takes," said Royal Mail CEO Simon Thompson.
"We would prefer to reach agreement with the CWU, but in any case we are moving ahead with changes to transform our business."
Royal Mail has been locked in a bitter dispute with the CWU over pay and operation changes at the over 500-year-old postal company, leading to several days of strikes in the past few months.
The British arm of International Distributions Services (IDS) had said it could cut up to 10,000 jobs and warned of more layoffs and even deeper financial losses if it cannot reach an agreement with the CWU.
The CWU rejected a new conditional pay offer at the end of October, which was subject to it agreeing to changes such as Sunday working and flexible working.
IDS reported on Thursday a first-half adjusted operating loss of 57 million pounds ($67.88 million), versus a profit of 404 million pounds last year, dragged down by Royal Mail. Its shares were down at 2% by 0858 GMT.
Royal Mail has seen parcel volumes slide from pandemic highs amid a tightening cost-of-living squeeze for customers and a tough economic climate in Britain.
The UK parcels market is expected to continue its decline and addressed letter volumes, excluding elections, could fall by a high-single-digit-percentage this financial year, IDS said.
Royal Mail has approached Britain to seek an early move to a five-day letter delivery, from the current six-day delivery, IDS said.
The former British postal monopoly still expects full-year adjusted operating loss for Royal Mail of around 350 million to 450 million pounds. It is targeting a return to a profit in 2024-25, helped by cost cuts.
The group's revenue for the six months to Sept.25 fell nearly 4% to 5.84 billion pounds.
IDS kept its outlook for GLS, its international division, unchanged, but added that GLS' cost base has also been hit by cost and wage inflation.
($1 = 0.8397 pounds)