More than 100 Post Office branches and some 1,000 jobs are at risk under a sweeping overhaul as the group looks to boost postmaster pay by £250 million over five years.
The Post Office revealed it is looking to offload 115 directly-owned branches within its 11,500 network, which could see them transferred to retail partners or postmasters, or potentially closed.
Around 1,000 workers are employed across the branches, while the Post Office also confirmed that hundreds of further roles are under threat at its headquarters as it looks to streamline back office operations.
A Post Office spokesman said: “We are considering a range of options to reduce our central costs.
“This includes considering the future of our remaining directly managed branches (DMBs), which are loss-making.
“We have had long held a publicly-stated ambition to move to a fully franchised network and we are in dialogue with the unions about future options for the DMBs.”
Post Office chairman Nigel Railton said the shake-up will also offer a “new deal for postmasters” by increasing their share of revenue and giving them a greater say in the running of the business as it looks to move on from the Horizon IT scandal that saw hundreds of subpostmasters wrongfully convicted.
The plans, which are subject to government funding, would see average branch pay doubled by 2030, with £120 million in additional pay by the end of the first year.
Mr Railton made the announcement at the company’s headquarters in London on Wednesday in a speech to postmasters across the country, as well as retail partners and Post Office staff.
He said: “The Post Office has a 360-year history of public service and today we want to secure that service for the future by learning from past mistakes and moving forward for the benefit of all postmasters.
“We can, and will, restore pride in working for a business with a legacy of service, rather than one of scandal.”
He added the overhaul also “begins a new phase of partnership during which we will strengthen the postmaster voice in the day-to-day running and operations of the business, so they are represented from the frontline to the boardroom”.
It follows a strategic review launched by Mr Railton in May, but is reliant on funding talks with government, which the Post Office said were “positive and ongoing”.
The Government is also said to have been consulted on the possibility of handing ownership of the network to thousands of subpostmasters across the country.
The 115 branches put at risk are are Crown Post Offices located in city centres and staffed by Post Office employees.
They are the only remaining branches directly owned by the Post Office, down from close to 400 in 2010.
The Communication Workers Union (CWU) union called on the Post Office to halt the plans and for the Government to intervene.
CWU general secretary Dave Ward said: “For the company to announce the closure of hundreds of Post Offices hot on the heels of the Horizon scandal is as tone deaf as it is immoral.
“CWU members are victims of the Horizon scandal – and for them to now fear for their jobs ahead of Christmas is yet another cruel attack.”
But the Post Office insisted that aims are to franchise the branches or transfer ownership to other parties, such as its network of retail partners.
Retailers such as WH Smith, Tesco, Morrisons and the Co-Op operate around 2,000 Post Offices across the country.
The rest of the network – about 9,000 Post Offices – are operated by independent postmasters.
As part of the transformation, the Post Office is also setting up a new postmaster panel to increase support and training, as well as a consultative council “to ensure postmasters’ interests remain front and centre”.
A spokesperson for the Department for Business and Trade said: “Post Offices are an integral part of the communities they serve and the services they provide for local people.
“The Government is in active discussion with Nigel Railton on his plans to put postmasters at the centre of the organisation and strengthen the Post Office network for its long-term future.”
A public inquiry remains ongoing into the Horizon IT scandal, which involved hundreds of subpostmasters who were wrongly convicted of stealing after the company’s defective accounting system made it appear as though money was missing from their branches.