HomeBusiness DigestPsmas plans to downsize operations

Psmas plans to downsize operations

EMPLOYEES of troubled Premier Service Medical Aid Society (Psmas) are jittery amid revelations that the society plans to embark on a massive downsizing exercise that could see the company shut down some of its pharmacies and radiology labs across the country.

By Taurai Mangudhla

According to a leaked Psmas retail operational report seen by businessdigest, the organisation’s revenues have been dwindling since January 2016, prompting management to take drastic measures and save the organisation from collapse.

The restructuring could cost Psmas pharmacy and radiology staff across the country their jobs and comes as pressure is mounting on management to address the salary disputes with workers.

According to the report, which contains the downsizing proposals, Psmas’ priority is to protect the medical centre concept and keep synergies with healthcare facilities.

Out of the 21 pharmacies, three are expected to be shut down in a move that is expected to affect at least 20 workers. Of the three, two are from Harare and one from Bulawayo.

The report says the society’s optometry division has suffered a 40% slump in revenues between July 2015 and July 2016, but will not be affected given that the 12 branches across the country have a centralised production and fitting function and have one practitioner covering two branches.

The move to downsize the company’s retail division, which management says will save the society millions in administrative and employment costs, comes as Psmas is struggling to get out of the woods largely due to government failure to settle a US$219 million debt which has resulted in the medical society failing to pay workers’ salaries.

Psmas, the country’s largest medical aid society by member numbers, is owed over US$219 million in unpaid subscriptions by government and US$22 million by various organisations in the private sector. In total the company is owed US$241 million.

Psams workers were last paid in May this year and are threatening to go on strike. This follows another industrial action in which workers at the society downed tools earlier in August over outstanding salaries and benefits. The society’s pharmacy division suffered a staff exodus with senior officials leaving for greener pastures.

Psmas executives confirmed the existence of the report describing it as an operational working document which has not even been approved by the executive directors, the MD and the board.

The medical aid’s arm, Premier Services Medical Investments (PSMI) spokesperson Polite Mugwagwa confirmed the company had been forced into a restructuring exercise by operational challenges.

“Organisations throughout the world restructure depending on circumstances and the economic situation in a particular country. It is one of the main survival strategies to survive especially in the challenging environment we are operating in. If it becomes necessary and it’s approved at the appropriate levels, we will as we have done in the past, consider it as a solution to our challenges and indeed the challenges facing all companies in Zimbabwe,” said Mugwagwa.

She, however, refuted claims pharmacies and radiology labs will be shut down.

“This is not true as the radiology labs and pharmacies are still working. If we decide to rationalise our business, our approach will take a lot of factors into account and only then can we know which business lines to affect and to what extent.”

But she confirmed workers had been forced to go on leave to manage costs.

“Like in any other organisation, it is normal in difficult environment like ours to make sure that people with outstanding leave days take them. It’s an effective cost containment strategy in this environment to manage leave liability, especially when business volumes are depressed as they are currently,” she said.

The tough working conditions have prompted Psmas workers to file for another industrial action on 5 September.

A letter from the Medical Professional and Allied Workers Union of Zimbabwe addressed to notice to the Ministry of Labour said Psmas non-managerial staff plans to embark on an industrial action at the society’s premises over non-payment of salaries from May 2015, annual bonuses and contractual incentives
“The intended collective job action shall continue as indicated unless the employer pays in to the workers a payment amounting to tat least three months’ salary on or before the date set for the action,” reads part of the letter in possession of businessdigest.

“Regarding the notice for industrial action, it is the act of people who realized they had mobilised our staff into conducting an illegal job action and are now trying to remedy it by applying to the Ministry of Labour.
“As previously advised we have always fully engaged our staff on the issue of salary arrears and fortunately the Ministry of Labour correctly responded to the application by reminding the Union we are part of the essential services sector and are therefore not allowed to go on strike. In addition to this, the medical industry is also guided by the Hippocratic Oath unlike all other industries.”

Recent Posts

Stories you will enjoy

Recommended reading