July 20, 2024

Six Thousand Post Office Employees To Be Retrenched

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Creditors have voted to approve a business rescue plan that is aimed at rescuing the ailing state-owned entity.

FILE PHOTO: Dispensing social grants may be one of the reasons government is pulling out all the stops to keep the Post Office alive. PICTURE: Nigel Sibanda/The Citizen

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PRETORIA: Around 420 Post Office branches will also be closed leaving 6,000 employees without jobs.

Business rescue practitioner Anoosh Rooplal has confirmed that they are going ahead with retrenchments of almost 6,000 employees at the South African Post Office.

Creditors have voted to approve a business rescue plan that is aimed at rescuing the ailing state-owned entity, which includes retrenching 6,000 of the company’s 11,000 employees.

Around 420 Post Office branches will also be closed. The rescue plan, first published by joint business rescue practitioners Rooplal and Juanito Damons last month, is contingent on a new R3.8 billion state-funded bailout.

Rooplal outlines the plan for the business rescue…

“The official meeting of creditors the main agenda was to vote on the adoption of business rescue plan implicated to announce that we’ve received the required 75 per cent votes in which then the business rescue plan was officially adopted.

“What that means is that the proposal in the plan becomes binding and all creditors it allow us to now move to the next phase where we focus on the implementation of the plan. Unfortunately, it’s not a great thing, we have to retrench 6,000 employees the formal process will now commence,” Rooplal said in a statement.

“We thank those creditors who voted in favour of the Plan. We believe that with our continued involvement, hard work and detailed strategy, we can restructure the Post Office into a future-proofed business that can provide ‘communications inclusion’ for all South Africans,” Rooplal added.

According to the rescue plan Sapo published in November, the entity had over 11,000 staff members on its books by September 2023. In the plan, employee costs were highlighted as a major operating cost, and to bring this down to a preferred level, Sapo would need to reduce annual employee costs by R1.2 billion.

The BRPs had estimated at the time that retrenchment packages would cost approximately R600 million.

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