POSTAL workers in East Lancashire were today bracing themselves for massive job losses.

Consignia is expected to cut as many as 40,000 jobs across the country over the next three years to fend off competition and end a trend of losing £1.5 million a day.

One fifth of the workforce is to be made redundant and up to 3,000 urban post offices will be closed.

Consignia was expected to release details of how East Lancashire will be effected later today.

Burnley Council leader and delivery union representative for the Postal Workers' Union, Stuart Caddy today branded the news as "absolutely unbelievable."

Coun Caddy said: "Morale is absolutely rock bottom."

In an embarrassing u-turn, Consignia's name will also be changed back to the Royal Mail.

A spokeswoman for Consignia confirmed the company would be making restructuring announcements "shortly".

She added that it would be "utterly inappropriate" to discuss any details before talks with staff had taken place.

She said: "Consignia is losing money at the rate of £1.5 million every day. The current business model will not sustain the level of costs we are incurring and this is putting the future of our services at risk."

At a minimum, Consignia needed to reduce its current costs by 15% or £1.2 billion, she said.

"We expect to make initial restructuring announcements about parts of Consignia very shortly.

"But our absolute priority will be to talk to our employees first, particularly if jobs are affected."

The company had "no option" but to make radical changes in order to restore profitability and improve cash flow and services.

Reports had suggested the company, formerly known as the Post Office, would slash 11,000 jobs today in a bid to cut costs and fend off competition.

Consignia has already said it could lose up to 30,000 jobs.

The company, which operates Royal Mail, Parcel Force and the post office network, is likely to offer voluntary redundancies.

The jobs axe will fall hardest on Parcel Force, which has been operating at a loss for 10 years.

Around half of its 12,000 employees will lose their jobs with the result of several depot closures, it is thought

Jobs will also go in administration and central management of the Post Office while cuts are also expected at a later stage in Royal Mail.

Consignia has said it expects to save £1.2 billion from the cuts, which it hopes will make it more competitive as PostComm proposes to open up the business post market to competition.

The postal watchdog intends to open up the market for bulk mail from next month at a level which it says represents one-third of Consignia's market by value.

A further third of the market would be opened up in spring 2004 with the entire market open to competition by 2006.

Consignia has argued that the proposals will mean an end to the current universal price for first and second class stamps.

THE Parcelforce depot in Blackburn is to close with the loss of 67 jobs, it was announced today.

Employees at the Shadsworth Park depot will be offered either work elsewhere in the group or voluntary redundancy.

Consignia announced it is axing 15,000 jobs across the country, which includes the closure of 50 of its 101 Parcelforce depots because it is losing £15million a month.

No job losses are expected in the Burnley, Pendle or Rossendale areas but postal workers said morale was at rock bottom. And management at Consignia said the cuts are just the start.

Consignia anticipates saving £460 million from the measures aimed at reversing daily losses of £1.5 million.

From July, the company will concentrate on more lucrative next-day deliveries and cut loss-making contacts, such as three day plus deliveries.

The standard parcel and mail order returns service is being transferred to the Royal Mail.

The move will result in 6,700 Parcelforce staff being axed in the next two years from the total workforce of 11,700 people.

Burnley Council leader and delivery union representative for the Postal Workers' Union, Stuart Caddy today branded the news as "absolutely unbelievable."

Coun Caddy said: "Morale is absolutely rock bottom."

Consignia chairman Allan Leighton described the package as "common sense re-engineering" and said the firm was in a "perilous position''.

He added: "Parcelforce Worldwide is losing £15 million per month as we have failed to reduce our costs fast enough as business has declined.

"We need to renew our operations and halt financial losses which put key services at risk.

"Both measures announced today are far reaching - but they are just the start, not the end.

"They will ensure real progress is made in the first year of a three year strategy to restore profitability, deliver positive cash flow, improve services and make the business a better place in which to work."

Blackpool, Bolton, Lancaster and Bamber Bridge Parcelforce depots are also to be closed .

But the depots in Preston and Leyland will remain open.

Consignia also plans to rationalise its air, rail and road operations to create a more efficient single network.