U.S. Postal Service looks to cut 220,000 jobs
* Postal Service says it needs to cut payrolls to 425,000
* Working with Congress, expects legislation in September
* Agency also would take over retirement, health benefits
WASHINGTON, Aug 12 (Reuters) - The U.S. Postal Service would eliminate about 220,000 full-time jobs and shutter about 300 processing facilities by 2015 under a proposal to bring its finances in order, a postal official said on Friday.
The Postal Service needs to cut payrolls to about 425,000 employees and take over its retirement and health benefits instead of participating in federal programs, Postmaster General Patrick Donahoe told Reuters.
The mail carrier, which receives no taxpayer funds, has been struggling with falling mail volumes as people communicate increasingly by email and pay bills online.
The agency reported a $3.1 billion net loss in its most recent quarter. It expects to be insolvent next month and default on a $5.5 billion retiree health payment.
Donahoe said the agency hopes to reach a deal with Congress by the end of September to give the mail agency more control over its finances and hiring.
"We know that the (mail) volume will continue to drop off from a First Class standpoint, so we've got to do the responsible thing and get ourselves in order," Donahoe said.
"It's our goal to work with both houses of Congress ... to help craft a bill that would be passable and signed by the president by the end of September."
That timetable will be difficult to achieve with Congress on recess until September 6 and with lawmakers bogged down by partisan wrangling over the budget deficit.
The agency has said it does not have enough authority to manage its finances and infrastructure. Past attempts to end Saturday mail and raise rates beyond inflation have been denied by Congress and the Postal Regulatory Commission.
CLOSING POST OFFICES
The Postal Service announced last month it would study almost 3,700 post offices for closure and said it would replace them with retailers contracted to provide postal services. The plan met with backlash from some lawmakers.
Donahoe said union leaders were "not coming out in favor of" the staff-cut plan. The Postal Service could lay off as many as 120,000 workers by 2015, and not fill another 100,000 expected to open up through staff departures.
But Donahoe said there was interest from legislators in the proposal to take over health and retirement plans, which he said could save $400 million to $500 million annually.
A bill from Republican Representative Darrell Issa would eliminate Saturday delivery and create groups to oversee finances and close post offices. Senator Tom Carper's and Senator Susan Collins's bills would return funds the Postal Service says it has overpaid into federal retirement programs.
"The only other way out of the pre-funding is for someone to give us the money to get out from under it. If that can't occur, we have to put other responsible proposals on the table," Donahoe said.
"This is strictly what we need to do between now and 2015 to get the organization profitable." (Reporting by Emily Stephenson, editing by Anthony Boadle)
- Tweet this
- Link this
- Share this
- Digg this
- Reprints
I honestly didn’t know I was THAT close (grin). But any postal worker with half a brain knew this moment would come. Sadly, it didn’t have to come. USPS should have known years ago they were a business model in sunset mode. And they should have had a scenario of gradual cuts in place so this moment of reckoning would have been easier to bear on the employees I left behind. But sadly, USPS lacks foresight and has been in denial for far too long.
When I was hired, I had a rather primitive (compared to now) personal computer. Internet providers had not yet surfaced in my metropolitan area. But, I did have 2400baud dialup modem access to two online services – GEnie (owned by General Electric) and QuantumLink (now known as AOL). Through them, I was communicating with people all over the world almost instantaneously. In any case, when I was hired, my hire-group was given speeches by local department heads. When the marketing rep finished his speech, he called for questions. I asked him, “Has USPS considered getting into the electronic mail business?” This was a valid question to ask back then – during the pre-internet years. The rep belly-laughed and replied, “Ha ha, we don’t see a future in it.”
Right now, marketing reps for USPS are STILL trying to convince people that sending written communication anywhere in the US in less than 3 days for less than 50 cents is “a bargain” – even as a growing number of people are discovering that they can send email anywhere in the US in less than 3 seconds for free.
Before there was even an Internet, there were online services like GEnie, QuantumLink, CompuServe, Delphi, and a whole host of others who offered people instantaneous communication “globally” in seconds (at no additional cost beyond their memberships). Back in the mid to late 1980s, USPS should have realized they were a business model in sunset mode … that eventually, “free” would outgun them. And at that point, they should have put a policy in place to tie workforce numbers directly to the mail volume – decreasing those numbers slowly over time. Had they done this, there would be no crisis as we see it today.
A lot of people blame the unions. And, to be honest, the unions are culpable for some of USPS’s problems. But the key to many of these problems lies in the bullheadedness of management at its highest level – some of whom still believe you can sell a hoop-skirt to someone who wants a bikini.
Follow Reuters