The Royal Mail chief executive, Rico Back, has stepped down with immediate effect in a surprise departure after less than two years in the job.

The 66-year old, who has been with the company for three decades, endured a battle with unions over restructuring plans for the ailing business. The German-born executive has also been criticised for remaining in Switzerland, his country of residence, during the coronavirus outbreak. Royal Mail said Back was following government advice to work from home.

He will be replaced in the interim by the company’s chairman, Keith Williams, a former chief executive of British Airways.

Back’s exit comes as Royal Mail reported a £22m decline in UK revenues in April. The decrease follows a dramatic drop in the volume of letters being sent during the coronavirus lockdown. Letter volumes fell by a third last month, to 308m.

Back said: “It has been a privilege to lead a company that is so much a part of UK life at this crucial time in its history. I am proud of what I, together with our dedicated and loyal team, helped to build.

“I look forward to seeing Royal Mail transform into a parcels-led international delivery company that continues to touch the lives of millions across the world.”

Under the terms of his departure, Back is on garden leave until 15 August and is to receive his salary and benefits during that period. He will then receive nine monthly payments totalling £480,000 in lieu of working his notice period, but will not receive a cash bonus or share awards for 2019-20 or 2020-21.

Royal Mail, which gave no explanation for Back’s departure, has agreed to pay £50,000 towards the legal fees he has incurred relating to his departure, and £25,000 towards “outplacement support”. Back was often at loggerheads with unions over a range of issues during his tenure, most recently over accusations that the company were not providing employees with sufficient personal protective equipment during the coronavirus pandemic.

The Communication Workers Union , which represents thousands of postal workers, told members last month that they should stay away from work if their sorting office had not provided equipment such as masks, gloves and hand sanitiser. The CWU estimated that up to half of sorting offices did not have sufficient protection in place.

Royal Mail said on Friday it had committed just under £40m to purchasing PPE for employees. The company said staff absence had fallen from a peak of 20% to 11%.

Back was also criticised when it emerged he was running Royal Mail remotely from his home overlooking Lake Zurich during lockdown.

Royal Mail, which employs 143,000 staff in the UK, said it had set aside £25m for cash bonuses to be given to frontline staff who continued to work during the coronavirus crisis. Staff will each receive an award of up to £200 in June. No bonuses will be paid to Royal Mail’s executive directors this year.

Relations between Back and unions deteriorated over a £1.8bn transformation plan to move the business away from the declining letters market towards parcel delivery, which is booming because of online shopping. However, unions have threatened strike action over issues including job security, pensions and employment conditions.

Under Back’s leadership Royal Mail’s shares fell to their lowest point since the business was privatised in 2013. At the same time Back has been criticised for taking home an “astronomical” pay packet, which included a £6m “golden hello” when he moved from the company’s European subsidiary to become chief executive.

Despite a sharp fall in letter volumes, the volume of parcels delivered has risen 31% in April, as UK consumers buy more online because of lockdown measures.

Costs at the UK operation are up £40m in the period from 30 March to 3 May, driven, said Royal Mail, by “overtime and agency resource costs” because of high levels of staff absence, and the introduction of physical distancing measures and PPE.

A spokesman for the CWU said the appointment of a new chief executive provided a chance for Royal Mail to mend relations with staff.

“The change of chief executive by Royal Mail Group must now bring about a total change in strategy and direction,” the union said. “Postal workers have been outstanding during this pandemic and are ready to embrace innovation, new products and building on their role in every community in the UK.

“It is absolutely critical that the new chief executive wants to work with the CWU to overcome the challenges we all face and deliver the postal service the public and our members deserve.”