The Royal Mail share price, also known as International Distributions Services PLC (LON: IDS), has risen 20.9% over the past three months despite the multiple strikes held by the Communication Workers Union (CWU) in November and December. As a result, many are wondering why IDS shares are rising instead of falling.
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The CWU just announced further strike action scheduled for 16 February 2023, where all its 115,000 members will go on strike for 24 hours. Yet despite the new strike date, there was little movement in the Royal Mail (IDS) share price. The shares seem immune to the ongoing tussle between the management and the workers’ union.
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The issues at Royal Mail are far from being resolved, with each side blaming the other for the lack of progress in resolving the standoff. Nevertheless, most investors agree that change in the postal service is now inevitable if the company wants to survive and compete against newer and nimbler competitors in what is now a gig economy industry.
Royal Mail’s management team is intent on implementing changes in how it relates with its workers by implementing new operating rules that it says will make it more competitive. On other hand, the CWU says that Royal Mail’s management is destroying the company’s culture of taking care of its workers and delivering seamless service to its customers.
In a rare occurrence, the Royal Mail CEO, Simon Thompson, has been summoned back to parliament for a second time to elaborate on some of his answers from his first testimony. Many MPs voiced concerns about his massive salary and bonuses when the company is losing about £1 million daily.
The conflict of interest is apparent, given that the Royal Mail CEO earns about 50 times what the average worker at his company earns, and some MPs questioned whether he was worth that much to the firm.
Many changes must happen at Royal Mail, and Simon Thompson appears intent on turning the company’s fortunes around with or without his current workers. The CWU has accused him of planning to fire the current full-time workers and replace them with much cheaper gig workers.
Still, the impasse between the two sides should be resolved to allow for the changes.
*This is not investment advice.
Royal Mail (IDS) share price.
The Royal Mail share price has risen 20.87% over the past three months despite ongoing CWU strikes.
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