The SA Post Office told MPs that it is in the middle of a process to reduce its staff and increase its productivity, reports BusinessDay.
According to the report, around 776 employees will be leaving the SA Post Office at the end of this month, having been offered voluntary severance packages.
The SA Post Office believes that this will account for savings of around R17 million per year.
The SOE will also be reducing other costs, such as the number of overtime and extended hours, which will further reduce its wage bill.
Additionally, the Post Office has signed a contract with the SA Social Security Agency (SASSA) for the payment of social grants to around 11 million people.
The restructuring of the SA Post Office will be undertaken in a multi-phase process, said the SA Post Office.
Salaries and perks drain over 70% of the SA Post Office’s total revenue, which has led the SA Post Office to determine that its current model is unsustainable.
The SA Post Office employs around 23,000 staff across 2,400 postal branches nationwide and incurred a R1.1-billion loss over its most recent financial year.
The Post Office has also been criticised for offering top-level executives lavish salaries, including the R4.2-million annual salary of former CEO Mark Barnes.
MPs were told that the last time the SA Post Office turned over a profit was in 2006, when it made R276 million excluding its government subsidy.
Recently, however, the SA Post Office’s struggles have seen it receive R4.4 billion in bailouts from the government – including R1.5 billion over the medium term, and R2.9 million for capex purposes.
The Post Office has said in the past that it plans on launching an e-commerce platform, which it believes would contribute increased revenue towards the struggle SOE.
It predicted that only 20% of its revenue would come from its postal services by 2030, owing largely to the potential long-term revenue provided by its e-commerce platform.