Struggling ZUPCO to lay off 400 workers

Business — By on September 26, 2010 11:57 pm

By Patrick Chidzero

The struggling Zimbabwe United Passenger Company (ZUPCO) has sought and been granted permission to lay off 400 workers by the government. Management say the cull is necessary to make the company viable.

Attempts to retrench however will not come cheap. ZUPCO will need at least US$2 million to finance exit packages for affected workers. The company cited a depleted fleet, poor revenue inflows and ballooning debt for its problems.

Buses from the company, once iconic on the country’s roads, have become tattered and serve as an example to all of poor management and corruption by several Zanu PF functionaries appointed to run the parastatal over the years.

ZUPCO has 1 077 employees and of its 325 buses, only 114 were on the road in May this year. The bus-worker ratio was one to five and the wage bill accounted for 34 percent of the revenue generated by the company.

Worse still operating profit margins declined from 26 percent to 4 percent as of March 2010. The bus company also owes its creditors over US$1,4 million in outstanding statutory payments and utility bills.

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