The jobs news came as the organisation announced that absences peaked at 15,000 in early January as staff went off sick with Omicron. It admitted that service levels in some areas of the country were impacted but it said that it was providing ‘targeted support’ in those areas most impacted.

Absence levels have now begun to reduce to below 10%. The number of affected local delivery offices listed on Royal Mail’s service update page reduced from 77 to 10 as of yesterday.

In an update on its transformation programme Royal Mail said it was ‘entering into formal consultation on a reorganisation to streamline operational management to improve focus on performance at a local level’.

Royal Mail said it would be engaging with unions Unite and the Communications Managers Association (CMA) on the proposals, which it expects will lead to a reduction of about 700 managers and deliver an annualised benefit of about £40m, with around £30m in the financial year 2022-23.

Simon Thompson, CEO of Royal Mail, said: “With the rise of Omicron, absence has been around twice pre-Covid levels, with around 15,000 staff off sick or isolating in early January. Thankfully, this is now improving. We are resolutely focussed on addressing these issues which have affected our service in some parts of the country. Year to date we have spent more than £340m on overtime, additional temporary staffing and sick pay, as well as providing targeted support for the offices most impacted.

“We have today entered into formal consultation on a management reorganisation to further streamline our operations and, at the same time, improve focus on local performance. We are committed to conducting the process sensitively, working closely with our people and their representatives. We have a track record of delivering change through natural turnover, redeployment and voluntary redundancy, wherever possible. Our full year outlook has been revised to take account of the costs of this reorganisation.”

Unite pledged to fight the plans to axe jobs. The union said its members were being made the scapegoat for Royal Mail bosses’ failure to maintain deliveries during the two-year old pandemic which has led to the possibility of fines from the regulator Ofcom.

The union, which represents thousands of Royal Mail managers, said today’s restructuring announcement could impact up to 900 of its members overall in the delivery division and the threat of an industrial action ballot was now on the cards.

Sharon Graham, Unite general secretary, said: “Coming on top of a record turn-around in the company’s fortunes, which resulted in the board handing over a £400 million giveaway to certain shareholders, this is cold comfort for those long months when postal employees were being badly hit by coronavirus at its worst.

“Unite will be giving maximum support to our members in fighting these unjust job cuts and this includes the possibility of an industrial action ballot. Now is the time for the top executives to reconsider their proposals.”