Royal Mail is to cut 700 management jobs as part of cost-cutting measures.

The postal delivery company announced the decision today, saying the plans will reduce costs by around £40 million a year.

It was also revealed staff absences peaked at 15,000 in early January due to the spread of the Omicron variant of coronavirus, which caused delays to services.

Royal Mail chief executive Simon Thompson 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 focused on addressing these issues which have affected our service in some parts of the country.

‘Year to date we have spent more than £340 million on overtime, additional temporary staffing and sick pay, as well as providing targeted support for the offices most impacted.’

The company benefited hugely from the pandemic due to a huge surge in online shopping and home deliveries.

But Royal Mail said last year’s peaks eased off over Christmas as shops were open, leading to falls of 4.9% in parcel revenues and 7% in volumes in the final three months of 2021.

Despite these drops, figures were still well up compared with pre-pandemic levels – at 43.9% in revenues and 33% in volumes.

On the planned job cuts, Mr Thompson added: ‘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.’

It comes after it was reported the postal service received more than a million complaints last year – its highest level for a decade. This is an increase of 50% on the previous year.

In response to this, a Royal Mail spokesperson said: ‘The overwhelming majority of all mail is safely and correctly delivered by our postmen and women, with just one complaint for around every 10,000 items of mail handled by Royal Mail in 2020-2021.

‘Where something goes wrong, our aim is to promptly deal with the problem and rectify it as soon as possible.

‘We are the only UK delivery company that publishes an annual complaints report, as well as a quality of service report which is subject to some of the most rigorous standards of any major European country.’

The surge in complaints comes as the postal service has been criticised for delays in delivery across the country.

Some 120 postal districts across the UK experienced delays over the Christmas and new year period, according to a report in The Observer.

And Royal Mail was found to have missed many of its targets in 2020-2021. It delivered around 75% of first-class letters the next working day, compared with its target of 93%.

On top of this, the price of a first-class stamp has risen 21% through the coronavirus pandemic and now costs 85p. A second-class stamp is 66p.

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