The US Postal Service has run up a major $2.8 billion net loss for the year ending September 30,2008, largely due to falling mail volumes resulting from the economic slowdown and payment
obligations. But it has denied reports of plans for large-scale redundancies in order to cut costs.USPS, the world’s largest postal operator, had stagnating revenues of $75 billion in 2007/08.Mail volume dropped 4.5% to 202.7 billion pieces, reflecting the worsening US economy and furthersubstitution of physical mail by e-mail.
Its expenses totalled $77.8 billion, including the $5.6 billion payment required by thePostal Act of 2006 to pre-fund retiree health benefits. This was less than 1% more than last year,when excluding all the retiree health benefit fund payments from 2008 and 2007. USPS noted that ithad saved more than $2 billion through cost-cutting measures that included the use of 50 millionfewer workhours compared to the previous year.
But the postal operator officially denied US media reports that it will soon lay off some40,000 employees. The organisation is seeking to match its workforce to a reduced workload throughvoluntary early retirements, a spokesman said. So far, 3,685 employees have accepted the offer ofvoluntary early retirement.
Looking ahead, Postmaster General John Potter said: “We expect the new fiscal year to beanother difficult one for the Postal Service and the entire mailing industry, as economic factorswill continue to reduce mail volume and increase expenses. As we continue to reduce workhours andother costs, our top priority remains providing excellent service to our customers,” he told thePostal Service Board of Governors at a meeting yesterday.
In addition to the weak or contracting economy and the diversion of mail to electronic means,the pre-funding of retiree health benefits continues to have a significant impact on Postal Servicefinances. “The Board will work with members of Congress to ease some of the financial pressure weare currently facing from the Postal Act,” Board Chairman Alan Kessler announced. “Legislativerelief is only part of the solution to the problems facing the Postal Service. The Board andmanagement will actively pursue the actions necessary to further reduce costs and grow revenue,” headded.
