SA Post Office retrench workers
SAPO to retrench close to 5000 workers. Image Credit: DA

Home » SAPO business rescue puts 1000’s of jobs on the line

SAPO business rescue puts 1000’s of jobs on the line

The Post Office joins a string of state-owned entities by going business rescue with yet another government bailout. The South African Post Offices is going into business rescue with yet another government bailout. SAPO has received billions in bailouts over the years without turning a profit. The latest developments mean that thousands of people will lose their […]

By Fazila Olla
13-07-23 11:22
in Business
SA Post Office retrench workers
SAPO to retrench close to 5000 workers. Image Credit: DA

The Post Office joins a string of state-owned entities by going business rescue with yet another government bailout.

  • The South African Post Offices is going into business rescue with yet another government bailout.
  • SAPO has received billions in bailouts over the years without turning a profit. The latest developments mean that thousands of people will lose their jobs.
  • The DA calls on both the Finance and Communications ministers to explain the ongoing financial crisis and to provide a turnaround plan for the failing entity.

The North Gauteng High Court has approved business rescue for the South African Postal Service (SAPO) after years of mismanagement.

This came after an 11th-hour attempt to stave off the liquidation of yet another ANC-destroyed state entity. In a Cabinet-approved plan, it will be given yet another bailout of R3.8 billion for its business rescue, with the possibility of further bailouts. This funding will derive from the existing 2023/24 National Budget at the expense of other programmes.

SAPO received R7.9 billion in bailouts from 2014-2019 and R2.4 billion in this year’s February Budget. With the latest R3.8 billion business rescue funding, total bailouts amount to a staggering R14.1 billion. Under the ANC, SOEs have become a black hole for bailout money with no political will for sustainable solutions. Despite these bailouts, SAPO has R2 billion in annual losses and R8 billion in liabilities. To make a plausible turnaround, it will have to cut 7000 jobs, at no fault of its hard-working employees.

This is on top of the 6 000 jobs it has already cut; as well as the 314 branches that have been closed in the last 3 years. SAPO, like other SOEs, has a bloated executive and instead of terminating their salaries, 7 000 families now face unemployment. SAPO’s CEO and top executives will still earn a combined R7.7 million this year.

The DA has called on the Finance Minister to explain why SAPO is being bailed out and for him to inform the public of which programmes will be cut to fund the bailout.

They have also undertaken to write to the Communications Minister to urgently save the impending job losses and to rather cut the wages of SAPO’s executives unless he wants 13 000 jobs lost to be his legacy. He must also explain what exactly the bailout will be used for in SAPO’s turnaround plan, what the targets and timelines are, and why this bailout will work when others since 2014 have not. They will also ask the Communications Minister to confirm how much SAPO’s business rescue practitioners will earn.

The DA will continue to monitor this ongoing disaster and not stand idly by while another SOE implodes to the detriment of vulnerable South Africans.

Tags: business rescue SAPO