The threat of a strike by postal workers has been lifted after the main postal workers' union said it had struck a deal over jobs.

The Communication Workers Union (CWU) which represents 90% of postal workers, said Consignia - the renamed Post Office - had agreed there should be no compulsory redundancies.

Earlier in the week Consignia had said up to 30,000 jobs out of a workforce totalling about 200,000 might have to go as part of a cost-cutting exercise.

But CWU deputy general secretary John Keggie said Consignia managers had told him the figure of 30,000 had been "speculative arithmetic."

"We are delighted that we have reached agreement so our members know that no-one can put them out of a job," he said. "Any job losses will be dealt with through collective bargaining and on a voluntary basis.

"It is a good agreement. Consignia has taken compulsory redundancies off the table and restored job security undertakings."

John Roberts, Consignia's chief executive, said the company would do everything in its power to manage future job cuts through voluntary redundancy and redeployment of surplus staff.

"I am delighted the CWU will be playing a major role in ensuring Consignia becomes more productive and returns to profitability," he said.

Strike threat

On Tuesday evening, Consignia stunned the postal workers' unions by saying up to 30,000 jobs could be shed over the next 18 months.

Consignia's John Roberts said at the time he hoped redundancies would be either voluntary or by natural wastage, but the company did not rule out compulsory measures.

Unions reacted angrily to the news and said they would hold a ballot for strike action unless the threat of compulsory redundancies was removed.

On Wednesday Consignia appeared to back-pedal on its original statement by stressing that the proposed job cuts were still speculative.

Talks took place on Thursday between Consignia and the CWU in a bid to avoid strike action.

Into the red

Consignia is struggling to cut costs after its previously profitable business has started making losses.

Mail volumes have fallen as the economy has slowed, and have also been hit by the increased use of e-mails and mobile text messaging.

The company posted a �100m loss for the first half of this year, and has already admitted that it will make an operating loss for the full year.

Consignia is aiming to cut costs by 15% - more than �1bn - by April 2003.