USPS closings plan to eliminate up to 35,000 jobs

Thu Feb 23, 2012 2:57pm EST

Feb 23 (Reuters) - The U.S. Postal Service announced plans on Thursday to close or consolidate 223 mail processing centers and eliminate up to 35,000 jobs as part of its strategy to cut costs by reducing its network of facilities.

The Postal Service has been losing billions of dollars each year as email chips away at mail volumes and as it faces massive annual payments to the federal government.

Postal officials said in September they would study more than 250 of the 461 processing sites for possible consolidation with other facilities as part of a series of cost-cutting steps. They also announced plans to end next-day delivery to cut back on overnight work.

Postmaster General Patrick Donahoe has said the agency needs to reduce $20 billion in annual costs by 2015. Moving processing away from the 223 centers would reduce operating costs by $2.6 billion annually, according to the Postal Service's website.

That includes eliminating as many as 30,000 full-time jobs and 5,000 non-career positions, USPS spokesman Sue Brennan said. The agency has gotten rid of about 140,000 jobs in the last five years, mainly through attrition, but still had about 650,000 workers at the end of 2011, according to its first-quarter financial statement.

None of the facilities would close before mid-May due to a temporary moratorium announced in December that is intended to give Congress time to pass legislation to help overhaul the mail agency.

The Postal Service, which does not receive taxpayer funds, wants Congress to eliminate an annual payment to prefund retiree health benefits and let it end Saturday mail delivery.

The agency also wants to take over its health benefits from the federal government and to close thousands of post offices.

Lawmakers have been deeply divided on whether to allow facility closures, end the prefunding payment and other measures. Some lawmakers have praised the Postal Service for "rightsizing" its network, while others say the planned closings will hurt the agency's business model.

"At a time when the Postal Service is competing against the instantaneous delivery of information from email and the Internet, slowing down mail delivery service will result in less business and less revenue," said Senator Bernie Sanders of Vermont in a statement on Thursday.

Donahoe told lawmakers last week, in a letter announcing the agency's five-year turnaround plan, that failing to take all of its planned cost-cutting actions could lead to annual losses of $18.2 billion by 2015.

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Comments (2)
Curly wrote:
Well there goes the unemployment rates unless 35,000 more quit looking for work

Feb 23, 2012 3:27pm EST  --  Report as abuse
denman wrote:
Bernie Sanders is exactly right—USPS management is making a bad situation worse by cutting back service when that is the main product the USPS has to sell. Draconian measures like the bill introduced by Rep. Darrell Issa (R-CA), the chairman of the House Oversight and Government Reform Committee, and Rep. Dennis Ross (R-FL), chairman of the committee’s subcommittee on the Federal Workforce, Postal Service and District of Columbia would result in the destruction of tens of thousands and even hundreds of thousands of middle class jobs.

This reckless downsizing of the USPS is ill conceived and not necessary when a more moderate and sensible option exists. The bill introduced by Rep. Stephen Lynch (D-MA) and the bipartisan group of 153 other co-sponsors of his bill, H.R. 1351 would allow the USPS to use its pension surpluses to cover its pre-funding costs, thereby resolving the immediate financial crisis without collateral damage. It is a better place to start.

Feb 23, 2012 4:08pm EST  --  Report as abuse
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