The SA Post Office’s business rescue practitioners have begun sending out 4,700 retrenchment letters to staff who will lose their jobs.
The job cuts are less than the 6,000 initially planned after consultation with unions at the Commission for Conciliation, Mediation and Arbitration (CCMA) that started in January and was completed on March 22. The Post Office will be left with 6,383 staff, down from 11,083.
Staff will be paid a total retrenchment package worth R600m in four tranches over eight months. Most of this is from the R2.4bn in funding that the Treasury gave the business rescue practitioners in 2023.
However, the practitioners are short of some of the money for the last tranches of the payments. They requested an additional R3.8bn in funding last November to revitalise the Post Office and modernise its equipment, vehicles and software, but this was not provided for in the February budget. Talks with the Treasury were continuing, they said.
Business rescue practitioner Anoosh Rooplal said the conclusion of the retrenchment payments was dependent on receiving a part of the R3.8bn in funding from the Treasury. Without it, he said, the plan to rescue the business would be at risk.
According to the rescue plan published in 2023, the Post Office had incurred R19bn in losses by September that year, after being unprofitable for over a decade. The biggest contributor to the Post Office’s financial challenges was its wage bill, which accounted for 150% of revenue.
It paid out R1.50 in salaries, for every R1 of revenue.
Deputy communication minister Mohlopi Mapulane told the parliamentary portfolio committee on communications last week that talks between his department and the Treasury were continuing.
Plans for the money include spending R1bn on modernising computer equipment, R550m on a logistics fleet and software system to modernise deliveries and R325m on mail processing equipment. The business rescue practitioners have also allocated investing R825m in modernising and improving branch infrastructure.
The DA’s spokesperson on communications and digital technologies Natasha Mazzone said the party was opposed to the R3.8bn bailout. More than R10bn has been spent on bailouts for the loss-making Post Office over the years.
“The Post Office has already had numerous bailouts and must now accept that they have no choice but to enter into partnership agreements with the private sector,” Mazzone said.
The fiscus could not afford a R3.8bn bailout for an entity that had been mismanaged, and warned continuously of this impending disaster, she said.
“The whole operation needs to be restructured and needs a functional business plan that is actually implementable by competent individuals. The most important thing is that all state-owned entities need to understand that we the people of SA refuse to bail them out any longer. The ANC needs to be held to account for how this failure happened, why action was not taken sooner and what action will be taken against those who allowed this devastation to occur.”
The business rescue practitioners said an investment committee had been set up to vet unsolicited offers from the private sector as it looked to partner with it.
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