The SA Post Office is considering laying off more workers as the state-owned postal company has been on a money-losing streak for 15 years and forced to operate without financial support from the government. 

The Post Office told Business Maverick that it is discussing the “possibility of retrenching workers”, but didn’t disclose how many workers might be affected. The Post Office said no final decision had been taken regarding retrenchments at the company.  

But a trade union representing the SA Post Office workers sees the matter about looming retrenchments differently, saying it has been informed by the company that thousands of jobs are on the line. 

Aubrey Tshabalala, the general secretary of the Communication Workers’ Union (CWU), a recognised trade union at the Post Office, said his office was handed a letter last week, with the state-owned company spelling out its plan to press ahead with retrenchments. In the letter, the Post Office said it planned to issue workers with Section 189 notices under the Labour Relations Act, which sets out the steps and consultations that a company must follow before embarking on retrenchments.

Tshabalala has put the number of workers to be affected by the possible retrenchment process at 6,000, but didn’t provide evidence to back this up. 

Retrenchments at the Post Office were always on the cards. 

In recent years, the Post Office launched a two-phase approach to retrenchments aimed at reducing costs including the company’s salary bill, which accounts for 61% of its total expenditure. Phase one of the retrenchment process saw 668 job cuts in 2021. Beyond planned retrenchments, the Post Office’s workforce was also reduced through resignations, dismissals and the expiration of fixed-term contracts, which led to the company reducing its headcount from 15,826 to 14,460. 

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The Post Office is now pressing ahead with the second phase of retrenchments in which the company is aiming to slash at least 600 more jobs. 

Various versions of the Post Office’s turnaround plans, which have been presented in Parliament, envisage the company only needing up to 10,000 employees to run an efficient and modern company that offers more than traditional postal services, including online car licence renewal bookings. 

Postal companies globally are struggling to reinvent their operations for a world in which consumers rely far more on electronic methods of communication than they do on mail. People are also opting for faster, more efficient parcel delivery services run by private sector companies. 

In South Africa, the Post Office is painfully aware of this major shift in consumer patterns, exacerbated by the company not being able to fulfil its basic function of delivering mail on time and to the right address. 

For instance, the Post Office’s mail delivery performance reached 75% in 2017. It fell to 68.3% in 2022. The Post Office has missed a self-imposed target of an 80% mail delivery performance for many years. 

A potential job-cut process at the Post Office will be fraught with complexities, even though it is intended to cut costs down the line. Any retrenchments have to be self-funded by the Post Office because affected staff have to receive severance packages.

But the Post Office cannot fund these packages because it is broke. The Post Office reported a financial loss of R2.2-billion during the year to the end of March 2022. The company has been reporting financial losses for 15 consecutive years. Operationally, only 303 Post Office branches out of 1,266 in its network are regarded as profitable — meaning that its branches are not suitable or sustainable for generating profits. 

Recent requests for taxpayer-funded bailouts by the Post Office have failed, with the company’s attempt for help recently rejected by Finance Minister Enoch Godongwana during his Medium-Term Budget Policy Statement in October 2022. DM/BM