South African Post Office turnaround plan calls for 5,065 job cuts
The South African Post Office has finalised a new three-year strategy to pull the organisation out of its current crisis. The plan will see 5,065 jobs lost, but new roles could be created in new and growth business areas, administrators said.
The new SA Post Office Corporate Strategic Plan 2015/16 – 2017/2018 aims to turn the troubled state-owned postal service into a competitive, customer-centric company running commercially viable services and achieving sustainable growth.
The plan was put together by the company’s Administration Team, which was appointed by ministers last year to stabilise the Post Office after a series of damaging strikes.
The company’s Administrator, Dr Simo Lushaba, said the new plan has been presented to South Africa’s lawmakers, including analysis on the shape of the current business, and assessing its various challenges.
Within the strategy there is also a specific Strategic Turnaround Plan that targets a R7.4bn improvement in revenue over the three years.
The company is also aiming to cut its operating costs by R4.6bn a year.
Lushaba explained, “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,” the Administrator went on.
Changes
The new strategy calls for “substantial” changes to the company’s corporate structure, cutting the number of senior executives reporting directly to the CEO from 15 to seven.
To boost revenue the company will look to launch new e-commerce, logistics and retail services.
Lushaba said the Post Office will also look to secure more government business.
“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 from the current 33% of total revenue to around 50-55%,” he said.
The new plan calls for a significant investment in the Post Office’s IT systems in order to turn the company into a more customer-centric business.
“The point is that the role of IT in business success cannot be diminished. In particular, there is a need to find ways of leveraging external expertise when there are clear signs of internal capability shortfalls, it is for this reason that the plan seeks to addresses the deep-seated IT challenges through partnership with service providers,” said Lushaba.
With labour relations a key challenge for the South African Post Office, the company said its new strategy would seek to stabilise arrangements with ongoing dialogue to resolve outstanding issues. But investigations and disciplinary processes are yet to be completed concerning the industrial action that has plagued the Post Office in recent years.
