Royal Mail to cut supplier costs by 20pc

first_img Show Comments ▼ by Taboolaby TaboolaSponsored LinksSponsored LinksPromoted LinksPromoted LinksYou May LikeTotal PastThe Ingenious Reason There Are No Mosquitoes At Disney WorldTotal PastMoneyPailShe Was A Star, Now She Works In ScottsdaleMoneyPailNoteabley25 Funny Notes Written By StrangersNoteableySerendipity TimesInside Coco Chanel’s Eerily Abandoned Mansion Frozen In TimeSerendipity TimesMagellan TimesThis Is Why The Roy Rogers Museum Has Been Closed For GoodMagellan TimesElite HeraldExperts Discover Girl Born From Two Different SpeciesElite HeraldZen HeraldThe Truth About Why ’40s Actor John Wayne Didn’t Serve In WWII Has Come To LightZen Heraldmoneycougar.comThis Proves The Osmonds Weren’t So Innocentmoneycougar.comGloriousaCouple Had Their Home Demolished Because Of ThisGloriousa Tags: NULL Sunday 7 November 2010 8:26 pm Share whatsapp center_img Royal Mail to cut supplier costs by 20pc whatsapp KCS-content Read This NextRicky Schroder Calls Foo Fighters’ Dave Grohl ‘Ignorant Punk’ forThe WrapCNN’s Brian Stelter Draws Criticism for Asking Jen Psaki: ‘What Does theThe WrapDid Donald Trump Wear His Pants Backwards? Kriss Kross Memes Have AlreadyThe WrapHarvey Weinstein to Be Extradited to California to Face Sexual AssaultThe WrapNewsmax Rejected Matt Gaetz When Congressman ‘Reached Out’ for a JobThe WrapPink Floyd’s Roger Waters Denies Zuckerberg’s Request to Use Song in Ad:The Wrap’The View’: Meghan McCain Calls VP Kamala Harris a ‘Moron’ for BorderThe Wrap’Sex and the City’ Sequel Series at HBO Max Adds 4 More ReturningThe Wrap2 HFPA Members Resign Citing a Culture of ‘Corruption and Verbal Abuse’The Wrap ROYAL MAIL has told its suppliers to strike new deals as it looks to cut 20 per cent costs from each contract.The top 150 suppliers to the company were told in a meeting in London ten days ago the operator was looking to “radically reduce costs” ahead of plans to privatise the service, according to reports yesterday.Under the auspices of meeting new chief executive Moya Green for the first time, the companies heard in a presentation that contracts would need to be renegotiated within 30 days, with the new deals in place by 10 December.Group procurement director Kath Harmeston told contractors: “Royal Mail is in transformation and needs cash. A radical cost-out programme is required to support the transformation.”The presentation set out a scheme to “radically reduce costs and our spend baseline by the end of the financial year – a 20 per cent minimum target reduction per key supplier”.Cost-cutting plans presented by Royal Mail included looking at payment terms to suppliers, the sale of some assets and the sale and leaseback of part of its property portfolio.Royal Mail last week revealed half-year group profits had fallen to £52m, down from £184m last year, with the letter business losing £66m.The cost-cutting comes as Royal Mail faces a potential cash crisis, caused in part by the £800m a year the company pays into its pension plan, which has a £10bn deficit.One anonymous supplier told a Sunday newspaper they were “furious” following the demand for tough cuts. Royal Mail would not confirm the proposals, though told City A.M. last night: “Royal Mail is striving to get the best value for money throughout the business and we are asking our suppliers for their ideas and proposals on how we might achieve this — but we are absolutely not imposing a blanket cut on suppliers’ bills.”Government outsourcer Serco last week withdrew a letter asking for a 2.5 per cent cash rebate from suppliers after a political backlash. last_img

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