Bright future for post office, CEO says

The South African Post Office (Sapo) has denied that the notice it served its employees last week informing them of its intention to retrench 6,000 workers was sudden and unexpected.

The Communication Workers Union, one of three unions representing employees, said Sapo dropped a “bombshell” when it sent a letter on Thursday with names of employees to be retrenched.

The post office said it was in consultation with labour unions on steps to right-size employee numbers. 

“The post office brought this matter to the table in November 2022. The first letter to the unions to introduce the section 189 (retrenchment) process was in November 2022.

“Prior to that, there have been a number of engagements with all unions recognised at Sapo, considering and exploring the various options to reduce the high cost of employment. These engagements still continue,” Sapo said.

Sapo said it last posted a profit in 2004 and the decline in its financial position began as far back as 2006. It said the economic recession in 2008 and adoption of smartphones accelerated the decline.

It said a protracted strike in 2014 was the straw that broke the camel’s back.

“Bulk business customers had to find alternative service providers, and this allowed new entrants to come in. Courier companies started encroaching onto Sapo business and they are continuing to do so.”

The post office ended the strike by terminating an agreement with labour brokers and absorbing 8,250 part-time workers, despite there being no full-time jobs for them. The result was a bloated structure and increasing costs.

Sapo said some of the contracts signed in the past were detrimental to it as it lost money in providing the service. One of them is the payment of social grants, where security costs related to the Sassa contract alone amount to about R600m a year.

The long queues as a result of payment of grants, especially the social relief of distress grants, were detrimental to other services of Sapo. It said customers avoided the queues by choosing different service providers for some of the revenue lines such as motor vehicle licences and financial services.

It said its universal service obligation was another contributor to its financial state. 

“Government obliges the post office to provide a service to all areas of the country, including the unprofitable areas, and the post office has been subsidising part of this mandate.”

Sapo said it was not allowed to provide any postal service during the first lockdown stage during the Civid-19 pandemic, forcing customers to make a sudden and unforeseen move to digital communication.

“The post office will need fewer employees who possess a skill set relevant to a technology driven-entity. It is imperative that this be addressed to ensure the turnaround and survival of the post office.”

CEO Nomkhita Mona said the future of the organisation was bright.

“We need to take some painful decisions if we want the post office moving with the times,” Mona told Newzroom Afrika on Tuesday.

She said the choice was between a dead post office or one with fewer people that could be re-engineered. She said the post office of tomorrow would focus on logistics and warehousing.

“We already have that infrastructure that supports that. The post office of tomorrow also talks to digitisation and modernisation. We require funding for us to implement our strategy.”

She said the post office was R8.5bn in debt.

“We are hamstrung with all this debt. We suggest we should be assisted to be able to implement part of this strategy because we know once we implement, we should be able to be self-sufficient in the long-term. The thing that hamstrings us is historical debt.”

TimesLIVE