Royal Mail plans to cut management jobs as it tries to cut costs.
The restructuring plan comes as the firm faces heavy criticism for its postal delays.
The company is struggling with Covid-related staff absences.
The delays have led to fines being imposed by the Ofcom.
Some customers have complained that they have to wait up to a month for important deliveries, including prescriptions and legal documents.
Royal Mail must take steps to improve its performance because of the effects of the Pandemic, according to Ofcom.
Large parts of London, Manchester, Hertfordshire, Wales and Scotland have been affected by the delays.
More than one in 10 of Royal Mail's staff were off sick or isolated in early January. Simon Thompson took over as chief executive of the delivery firm a year ago.
Mr Thompson said that absences had been a problem in delivering productivity targets. He said that the firm had spent more than 300 million dollars on overtime, additional temporary staffing and sick pay.
Over the Christmas period, around one in eight Royal Mail staff were affected by sickness and absences. It had failed to meet delivery targets before.
Royal Mail is being pressured by customers, regulators and shareholders for more efficient operations. Managers will bear the brunt.
The company says that it will save 40 million dollars a year by losing 700 posts. The unions will have to be consulted on the proposals.
In the first year of the Pandemic, Royal Mail saw a rise in demand as people switched to shopping online at home.
With High Street stores open again, demand has fallen, but the Royal Mail chairman said the trend for higher numbers of parcels being delivered remained.
Between October and December, the volume of domestic parcels delivered by Royal Mail was higher than in the previous year, but lower than in 2020. The October to December period saw a decline in the number of letters handled by Royal Mail.
Royal Mail said it believed it was retaining its share of the deliveries market, although it saw a slower than expected pick-up around the Black Friday shopping period.
The challenge for Royal Mail is to improve both quality and efficiency, according to Mr Williams.
Royal Mail said price rises in the UK and elsewhere have raised costs for both domestic and international businesses.
The delivery of our transformation and modernisation plans remain important in light of the fast paced change we are seeing and ongoing inflationary pressures.
Royal Mail said that there would be fluctuations in the number of Covid tests it would deliver.
In December, the firm agreed to double the number of tests delivered to a total of 900,000 a day. Covid tests accounted for less than 10% of Royal Mail's parcel volumes over the course of last year.
The Royal Mail said the job cuts would incur a 70 million charge but would deliver 40 million savings annually.
In June 2020, the company axed a fifth of its managers.
