Postal unions have reacted angrily and raised the prospect of industrial action after Royal Mail announced plans to cut 1,600 jobs in the postal group's first big round of redundancies since it was privatised in October.

The company said the cuts would affect managers, mainly from backroom operations and head office, with no impact on staff who sort and deliver mail. About 300 new or expanded jobs will be created, taking the net number of leavers to 1,300 out of a workforce of 150,000.

The Unite union condemned the treatment of employees, who it said deserved better. The union, which represents 7,000 Royal Mail managers, said if management made forced redundancies it would consider balloting for strikes.

Brian Scott, Unite's officer for Royal Mail, said: "First the government sells off Royal Mail on the cheap and now the newly privatised service is ruthlessly sacrificing jobs.

"We do not believe that it's a coincidence that this announcement has been made just before the company prepares to announce its first full set of accounts since privatisation. It's more proof that Royal Mail's primary reason for existing is now about making profits rather than serving the nation."

Royal Mail shares were the biggest fallers in the FTSE 100 index, dropping 1.5% to 575p. The formerly state-owned postal service floated on the stock market in October in what critics said was an underpriced sale that benefited City investors. The company said at the time that it would have to become more efficient to compete with private operators.

The company announced its first job cuts since privatisation days before its financial year-end on 30 March. Royal Mail posts its first set of annual results to the City in May.

Dave Ward, deputy general secretary of the Communication Workers Union, said the cuts were drastic and deeply concerning. The CWU mainly represents frontline postal workers but it said it would fight to protect jobs.

The union's top Royal Mail representatives will discuss the cuts at a scheduled meeting on Tuesday and may make a further announcement then.

The company hammered out a landmark deal with the CWU late last year that enshrined workers' rights and appeared to usher in an era of post-privatisation industrial peace. Royal Mail said it would consult with both unions about the cuts.

Moya Greene, Royal Mail's chief executive, said: "We are continuously improving our efficiency, whilst maintaining our high quality of service. We need to do so in order to effectively compete in the letters and parcels markets. This is the best way to ensure the continued delivery of the universal service and the good quality jobs we provide for our people."

The company said the job cuts would cost it about £100m and that total "transformation costs" for the financial year ending 30 March would be £230m – £70m higher than it had predicted.

About £25m of the cost savings will take effect next year, partly making up for a likely increase of between £70m and £80m in the cost of pensions. Royal Mail said the job cuts were not a response to the rising pension costs.

Royal Mail said about 50,000 employees had left since 2003 and that it had a good record of cutting jobs by not replacing leavers, finding people new jobs and voluntary redundancy.