Post Office turnaround plan to shed over 5,000 jobs

The South African Post Office (SAPO) plans to shed more than 5,000 jobs. This is according to their turnaround strategic plan which was presented to the Portfolio Committee of Telecommunications and Postal Services.

Other features of the SAPO turnaround plan presented include substantial changes on the corporate structure, which inter alia, significantly reduces the number of direct reports to the Group CEO from the current 15 executives to a total of seven.

But the entity says that it has plans to mitigate the loss of jobs by creating entrepreneurial opportunities in retail agencies, the delivery of goods, and the provision of services.

Job losses will also be mitigated by creating new opportunities in the inspection and enforcement of regulations, mailroom management and coordination.

According to the SA Post Office Administrator Simo Lushaba, the entity’s turnaround plans presented trails intensive diagnosis of its business, and overall macro and micro environmental challenges, by the organisation and management experts in his team.

“We had to dig deep into the business for the plans we have devised to address the SA Post Office’s business and other operating challenges in totality.

“Some of the challenges we uncovered relate to a business supported by an inflexible operating model and sky top fixed costs. Leadership constraints and the entity’s inadequate execution capability reflect the SA Post Office’s seeming inability to match its obviously declining mail revenues with revenue growth in its other business segments, such as its retail arm,” Lushaba explained in a statement.

Lushaba said the SAPO Corporate Strategic Plan 2015/2016 to 2017/2018, was aimed at turning it around and modelling it into a customer-centric company that is competitive and engages in commercially-viable business activities which foster sustainable growth.

According to Lushaba, the plan presented models to the entity to achieve a R7.4bn revenue improvement over three years, made out of R4.4bn additional revenue generated, reduced costs exposure of R4.6bn and less R1.6bn stemming from losses, additional depreciation, tax and interest.

Securing additional government business is amongst the key features of the projected revenue growth outlined in the plan.

“It is a strategic intent of the plan to position the SA Post Office as a key service provider of government services to citizens of South Africa, and grow government business up from the current 33% of total revenue to around 50 to 55%,” said Lushaba.

Other features of the turnaround plan include the introduction of services which will be introduced in e-Commerce, logistics, retail, including improving the efficiency of mail operations to ensure alignment with market changes.

Information Technology (IT) is another key aspect that has been identified for improvement in the plans to make the SA Post Office a customer-centric company. The company will plan to also invest significantly in sourcing appropriate external partnerships in the IT space to bypass the time and financial costs of hosting internal skills while bringing in increased efficiency.

Lushaba said that amongst the key benefits of the turnaround plan will ensure that the Post Office enjoys a continued stable labour environment based on ongoing dialogue to resolve all issues in a manner that sustains the business.

In addition, the turnaround of the SA Post Office will be supported by the completion of all investigations and disciplinary processes that are conducted on the past issues that plagued the entity, which is one of the key mandates the Minister has given to the administration team.

“In our view, this Corporate Strategic Plan ushers in a new era for the SA Post Office; increased competitiveness which stems from agile and responsive business keenly aware of the ever-changing customer needs,” said Lushaba.