Royal Mail, now known as International Distributions Services PLC (LON: IDS) shares, have pulled back today as the parcels and mail company faces further strikes ahead of the holiday season.
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The company managed to avoid the strikes planned for 12 Saturday, 2022, but the Communication Workers Union (CWU) issued a new notice regarding industrial action scheduled for Thursday, 24 and Friday, 25 November 2022.
Looking at the Royal Mail (IDS) share price chart below, we can see that IDS shares have risen over 22% in the past month despite the ongoing strike action after the company unveiled a bold plan to revamp its operations on 22 September 2022.
The parcels and mail delivery company unveiled a plan to restructure its working relationship with the CWU after the union crossed a crucial threshold regarding the number of days it had organised national industrial action. The company proposed sweeping changes to modernise its operations and restructure its corporate culture.
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Royal Mail is still working on the plan, evidenced by its latest offer to the CWU of a 7% salary increase spread over two years and a 2% lump sum payment for the workers this year. The new offer is dubbed a pay-for-change offer, which calls on the CWU to embrace the much-needed changes to help Royal Mail remain competitive in the parcels industry.
However, the CWU is opposed to the new work arrangements proposed by Royal Mail, which will see its members sign performance contracts, which they argue will make their members into gig workers similar to those employed by Uber.
Most investors agree that change is needed at Royal Mail if the company is to remain operational, given the massive changes that the global parcel delivery industry has undergone in recent years. However, it is also important to note that Royal Mail’s international subsidiaries, GLS Group and Parcelforce, are profitable.
Royal Mail (IDS) shares have come up against a long-term resistance level, as shown in the chart below. The shares will likely pull back before pushing higher and breaking above the resistance level. We could get a deep pullback if the situation deteriorates.
*This is not investment advice.
The Royal Mail (IDS) share price chart.
The Royal Mail (IDS) share price has risen 22.62% over the past month since bottoming in mid-October.
