But the annual report indicated that mail volumes and revenues are falling, competition from private postal service providers is increasing and electronic mails are also a growing threat (Royal Mail group, 2009).By autumn 2007, a series of postal strikes started in the UK and it severely affected those companies which were directly dependent on Royal Mail as a source of postal service providers (Data Lite, 2007). In 2007 the company agreed to work in collaboration with the union to implement modernization. But at present the company’s employees are under the shadow of threat and fear of losing the job and pay cut, hence they called for a strike in August 2009 and from then onwards the matter turned more severe (Kollewe, 2009).Royal Mail said they are losing a number of parcels because the company is not as technologically advanced as the private competitors. But modernization will result in job loss and pay cuts, so the postal employees have gone on strike (BBC NEWS, 2009). The modernization plan was prepared in 2007 but it was in halt because of certain administrative reasons, now as the management is planning to make the company more competent, this modernization plan has to be put to use. The company is losing the sale because to date many works are to be done manually and for that company has to employ more workers. After modernization, the work will be much faster even with less number of employees. This will enhance Royal Mail’s profitability by reducing the cost of operation (Telegraph, 2009). Because of this prolonged series of strikes, the one who suffered the most are local people and small businesses. In early October the Royal Mail lost its £25 million contracts with Amazon, the second-largest customer of Royal Mail. Amazon took this action to protect the Christmas sale to suffer from late deliveries (Boyle, 2009).
The Prevailing Problem of Royal Mail