Royal Mail reveals staff bonus of up to £500 as half-year losses mount

The move – which will cost Royal Mail around £61m – comes as the new boss of owner International Distributions Services (IDS) is pushing on with an overhaul to address poor service performance and widening losses.

Earlier this week, Royal Mail was fined £5.6m by regulator Ofcom for a “significant” failure to meet its postal delivery targets on first and second class mail in 2022-23.

IDS revealed on Thursday that Royal Mail tumbled deeper into the red with underlying losses of £319m for the six months to September 24, against losses of £219m a year earlier.

The wider group cut its full-year earnings guidance after the Royal Mail losses pushed it deeper into the red with overall operating losses of £243m against losses of £157m a year earlier.

IDS said it is now expecting to roughly break even over the full year to March, having said in July that it would make an underlying operating profit.

Recently hired chief executive Martin Seidenberg said the group is focusing on boosting quality through a “stable” workforce to help turn around Royal Mail’s fortunes as it seeks to put crippling strike action and performance issues behind it.

He said: “My top priority now is improving quality. From experience, I know that quality is key for customer satisfaction and sustainable growth, so we are pulling out all the stops to deliver Christmas for our customers.”