Whistl, Britain’s second-largest postal service, has suspended deliveries, putting the jobs of its 2,000 workers at risk.
The Dutch-owned company, which was formerly known as TNT Post, has sent home its staff and is reviewing the viability of its loss-making “final mile” service.
The move boosted shares in its rival Royal Mail by 3.74 per cent, making it the top riser on the FTSE 100 yesterday.
Whistl owner PostNL’s decision followed news last week that private equity backer LDC – a division of Lloyds – was pulling out of planned funding to help expand the business.
Before that, Whistl, which operates in London, Liverpool and Manchester, had planned large-scale growth to challenge the market leader.
Yesterday the company stated: “We have now commenced an extensive review of the viability and potential for the rollout of an E2E (end-to-end) postal delivery service in the UK.
“To stem the losses from the operations, we have taken the difficult decision to suspend the current E2E service during the review process and all mail will now be delivered through our long-standing downstream access service until we have concluded the review.”
The company said it would consult with both employees and union representatives to explore “viable proposals to secure the continuation of this service”.