The Times of London said Royal Mail is considering cutting its workforce as it increases automation and tries to compete in the marketplace.

Royal Mail has said over the next four to five years it will need either efficiencies or job losses of 30 percent in the letters division, the Times reported. That could mean 40,000 job cuts, the newspaper said.

"In an increasingly competitive market we are of course testing new, more efficient ways of working including greater automation. Until we have done this we cannot confirm the impact on jobs," Royal Mail said in a statement to the newspaper.

Meanwhile, Royal Mail is trying to implement $590 million in cuts by the end of 2007 to make up for a revenue shortfall, the Times reported.

Ian Griffiths, the managing director of Royal Mail letters, resigned a year after taking the job, saying the short-term cuts weren't possible, the newspaper reported.