Phase 2 of Post Office retrenchments looms

South Africa’s postal services was not one of the SOEs to feature in Minister of Finance Enoch Godongwana’s Mid-Term Budget last month.

But this did not mean that the enterprise was not experience financial woes.

According to reports, the Post Office plans to lay off a number of its employees in coming months. At present, there has been no indication of exactly how many employees this will be, but unions are speculating that it could be in the thousands.

Previously, the entity communicated that it was launching a two-phase approach to its retrenchments. In 2021, just under 700 staff received retrenchment letters. Staff numbers went down from around 16 000 to just over 14 000.

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Phase 2 of retrenchments

The Post Office will go ahead with the second phase of retrenchments this year, where around 6 000 workers are said to be in line to lose their jobs.

The Congress of South African Trade Unions has released a statement saying that it is extremely concerned by the South African Post Office’s (Sapo) announcement that it plans to retrench up to 6 000 workers due to a stagnant economy and dwindling funds.

“We call on the government to intervene to halt the planned retrenchments at Sapo with immediate effect,” said Sizwe Pamla, the union’s spokesperson.

“The role of Sapo needs to be reconsidered and with its infrastructure, it can be used to provide more than the services that it currently delivers.

“The federation is disappointed that government continues to weaken the capacity of the state through public service retrenchments. This is pushing more into poverty and is undermining the capacity of the State to deliver much needed services,” Pamla said.

A coherent turn-around plan needed

He added that the Department of Communications and Digital Technologies needs to work with Sapo and the Post Bank to develop a coherent turnaround plan to not only save these workers’ jobs and wages, but to stabilise and repivot Sapo, and to launch the Post Bank.

Government needs to provide the necessary support for these turnaround efforts, including recapitalising the Sapo and Post Bank.

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Cosatu believes that parliament and the department need to prioritise the Postbank Amendment Bill which will establish the Post Bank as a functioning commercial bank targeted at the unbanked and low income consumers as well as the Post Office Amendment Bill which will enable Sapo to expand the products it offers customers, such as entering offering courier services, linking with the Post Bank, and offering access to various government services such as social grants and IT hubs for SMMEs. 

“This new imagined role for Sapo and Post Bank is critical if they are to stabilised and rebuilt, and we are to ensure disadvantaged communities are to have access to important postal, financial and other services.

“The capacity of the state was severely tested during the Covid-19 lockdown and the country’s social disparities were laid bare. It looks like government has not learned any lessons,” Pamla lamented.

A commercialisation of the State-Owned Entities

Pamla implied that the collapse of service delivery could be traced back from the decision to push for the reduction of the headcount of personnel in the public sector and the commercialisation of the State-Owned Entities in their mode of governance.

“This right-wing push for SOEs to operate along the lines of the private sector is the source of the inefficiencies and corruption that we have seen.

“We find it very unfortunate that the South African government is continuing to adopt regressive and contractionary policies that only focus on cutting social expenditure and weaken the capacity of the state. The deceleration of fiscal spending since 2014 and now the outright reduction of spending has plunged the economy into the stagnation and has also led to the collapse of state institutions,” he said.

The Post Office reported a financial loss of R2.2-billion during the year to the end of March 2022. The SOE has been reporting financial losses for 15 consecutive years. Less than a quarter of its 1 266 branches are said to be profitable.