Postal Service Could Cut Up to 120,000 Jobs

The financially strapped U.S. Postal Service is considering cutting as many as 120,000 jobs.

Facing a second year of losses totaling $8 billion or more, the agency also wants to pull its workers out of the retirement and health benefits plans covering federal workers and set up its own benefit systems.

Congressional approval would be needed for either step, and both could be expected to face severe opposition from postal unions which have contracts that ban layoffs.

The post office has cut 110,000 jobs over the last four years and is currently engaged in eliminating 7,500 administrative staff.

But the loss of mail to the Internet and the decline in advertising caused by the recession have rocked the agency.

Postal officials have said they will be unable to make a $5.5 billion payment to cover future employee health care costs due Sept. 30. It is the only federal agency required to make such a payment but, because of the complex way government finances are counted, eliminating it would make the federal budget deficit appear $5.5 billion larger.

If Congress doesn't act and current losses continue, the post office will be unable to make that payment at the end of September because it will have reached its borrowing limit and simply won't have the cash to do so, the agency said earlier.

In that event, Postmaster General Patrick Donahoe said, "Our intent is to continue to deliver the mail, pay our employees and pay our suppliers."

Postal officials have sought congressional assistance repeatedly over the last few years, including requests to be allowed to end Saturday mail delivery, and several bills have been proposed, but none has been acted on.

In addition the post office recently said it is considering closing 3,653 post offices, stations and other facilities, about one-10th of its offices around the country, in an effort to save money. Offices under consideration for closing are largely rural with little traffic.

And in June the post office suspended contributions to its employees' pension fund, which it said was overfunded.

In its 2010 annual report the post office reported a loss of more than $8 billion on revenues of $67 billion and expenses of $75 billion.

And even while total mail volume fell from 202 billion items to 170 billion from 2008 to 2010 the number of places the agency has to deliver mail increased by 1.7 million as Americans built new homes, offices and businesses.

The latest cutback plans were first reported by The Washington Post, which said a notice to employees informing them of its proposals stated: "Financial crisis calls for significant actions, we will be insolvent next month due to significant declines in mail volume and retiree health benefit prefunding costs imposed by Congress."


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14 Comments

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pacecar25

Yes, cutting 120,000 postal workers will painless.

August 12 2011 at 12:53 PM Report abuse rate up rate down Reply
gpfs

There are three post offices within two miles in my area. Ridiculous! Who really must have Saturday delivery? Congress has been responsible for the Postal Service CEO not being able to run the Company!

August 12 2011 at 11:59 AM Report abuse rate up rate down Reply
josephn126

Postal employees, through their unions, have priced themselves out of being needed. Sorry to hear 120,000 might become un employed but there is no promise of lifetime employment for federal employtees--unless you are a federal judge-then you can act in any inept corrupt manner for as long as you want.

August 12 2011 at 11:52 AM Report abuse +3 rate up rate down Reply
swtdreamluvr

unions will destroy the postal service and states the have union employees,everyone will lose there pensions.THE YOUNG PEOPLE IN THIS COUNTRY HAD BETTER WAKE UP BEFORE IT'S TO LATE......................GREED AND GOVERMENT SPENDING WILL DESTROY ARE GREAT COUNTRY..

August 12 2011 at 11:27 AM Report abuse +1 rate up rate down Reply
cpo1514

And the unions will go along with this under Obamas watch??? Not likely.... Last time this happened was under Regans watch.... the USPS wanted a strike and the Natl Guard was mobilized.... Obama doesn't have the manhood for this type of action.... right Moochelle??

August 12 2011 at 9:38 AM Report abuse +3 rate up rate down Reply
don917

If you let the Post Office raise the cost of a letter to 50c it would be profitable. Close remote underused small offices, end Saturday delivery, freeze wages, reduce overhead, along with a lot of othe tweeks and you can save Humpty Dumpty.
Ever get out of UPS or FedEx for lett than $10 ? !!! If you tear up the P O all you will have left for national delivery will be UPS or FedEX !!!!!

August 12 2011 at 8:14 AM Report abuse rate up rate down Reply
1 reply to don917's comment
maa2626

economics my friend, to be profitable you must charge true cost of delivery. if you are charged 10$ to mail a letter you will figure out a way to get whatever from point a to b via computer or phone call.

August 12 2011 at 10:29 AM Report abuse rate up rate down Reply
maa2626

put the post office up for sale, and let it be privitzed. can you imagine the money it would raise and save!! real estate, vehicles, infastructre, artfacts, union contracts, pensions, and leases would all be sold or renegotiated. better yet let it go bankrupt and sold at auction! the true market value of an item. but alas, the feds would step in and a massive bail out would ensue. unions pensions, arcane work rules, time employed, vaction days, healthcare, union dues, building leases, job banks etc, etc etc would be not be touched. lease or sell the post office to Fed/EX/ UPS/ or DHL with a blank slate and a machete.

August 12 2011 at 7:05 AM Report abuse -1 rate up rate down Reply
1 reply to maa2626's comment
BRUCE

The private sector does not have a stellar performance record either. The post office provides universal service to everyone and every place. Companies like FedEx, UPS and DHL pick and chose where they will deliver. We are fast to come up with solutions but often do not realize the ramifactions of our suggestions. The Post Office has served our country well for over a 150 years! Taking it apart is easy, fixing the mess left will be hard. If you believe the market fixes everything just look at our ugly economy. The problems facing our nation is a combination of government and private enterprise failures.

August 12 2011 at 7:44 AM Report abuse rate up rate down Reply
1 reply to BRUCE's comment
maa2626

sentance by sentance
1 agreed
2 universal service is great, charge true cost ny to ca letter 2$
3 they will deliver anywhere, you just need to pay the freight
4 gotta start somewhere
5 buggy whips, whale oil lamps, corsets, cocaine in coca cola
6 combo problem 30 percent business, 20 percent citizen 50 percent feds
7 agreed

August 12 2011 at 10:26 AM Report abuse rate up rate down
Amalia Lay

Unemployment numbers are comprised of those that are in the job market for the past 30 days. It does not include those that have not been in the job market in the last 30 days: people who have given up looking; those that have gone off unemployment because it has run out. One solution to unemployment is "High Speed University" check it out

August 12 2011 at 2:20 AM Report abuse rate up rate down Reply
BRUCE

One more american institution is rapidly declining do to advancements in technology and communications. That in addition to a loss of civility, privacy, jobs and a widening gap in wealth is making progress look unpromising. Sometimes forward progress really means going backwards in some areas. Another 100,000 jobs that support families will disappear with no real prospects for new employment in the future. There are faces and dreams behind those cold money figures.

August 11 2011 at 11:24 PM Report abuse +1 rate up rate down Reply
katla44

So let's go out and spent millions of dollars on flat sorter machines. Why would they do that when there is no mail? It is all mismanagement!

August 11 2011 at 11:07 PM Report abuse rate up rate down Reply