USPS has announced that it will cut 7,500 managerial jobs and close sevendistrict offices across the USA by March 2012 as part of its cost-cutting measures with the aim togenerate approximately $750 million of annual savings.
USPS Postmaster General Patrick R. Donahoe commented: “I am confident thatwe have developed a strong plan that takes a key step toward a leaner and less bureaucraticstructure, one that is fair to our employees and one that will meet the future needs of ourcustomers and the mailing industry.”
As part of the efficiency measures, about 7,500 positions will beeliminated across the organisation. “It’s critical that we adjust our workforce to match America’schanging communications trends as mail volumes continue to decline,” Donahoe explained. “At everystep and with every change, our focus remains on our customers and continuing to provideoutstanding customer service.”
The seven district offices to be closed are located in Columbus, SouthEast Michigan, Northern Illinois, South East New England, South Georgia, Big Sky and Albuquerque.District offices house only administrative functions and do not affect customer service, maildelivery, Post Office operations or ZIP codes. The functions of these seven districts will beassumed by district offices within close proximity, the company stressed.
Along with job cuts and office closures, the US postal operator will offervoluntary early retirements and financial incentive programmes to eligible employees to reduceheavy retiree health-benefit costs. Employees must be 50 years old, with at least 20 years ofservice; or any age with at least 25 years of service to qualify for the incentive. Employees whoaccept the offer or already meet existing retirement qualifications will receive $20,000 paid overtwo fiscal years to separate from the Postal Service.
The announced job cuts focus on administrative and executive positions. “Additional staff reductions will occur as the Postal Service makes necessary changes to its networkand retail operations,” USPS added.
USPS pointed out that the main objective of the restructuring is toenhance and strengthen customer service and relationships while enabling the company to adapt tochanging market forces and continuing mail volume decline more quickly.
“Mail remains valuable. It is at the heart of a $900 billion industry thatcontinues to drive commerce and the American economy. We will continue to work with Congress andour employees to achieve the long-term, structural and legislative changes we know we need toremain a viable organisation,” Donahoe concluded.
Meanwhile, the US Postal Regulatory Commission (PRC) has responded to thefive-day delivery proposal by USPS to end Saturday mail delivery, collection and outbound mailprocessing.
PRC’s Chairman Ruth Y. Goldway, commented: “Some of the Commission’sanalysis suggests that even lower estimates of savings and higher volume losses are possible. Inall cases, we chose the cautious, conservative path. Our estimates, therefore, should be seen asthe most likely, middle ground analysis of what could happen under a five-day scenario.”
According to PRC’s analysis, the annual net savings generated througheliminating the mail delivery on Saturday would amount to $1.7 billion instead of the $3.1 billionestimated by USPS. The commission stressed that in either case full savings would not likely to beachieved until the third year of implementation.
The Commission’s estimate of net revenue losses due to volume declinescaused by the service cuts is $0.6 billion as opposed to $0.2 billion calculated by USPS. PRCstressed that the planned changes would cause about 25% of First-Class and Priority mail to bedelayed by two days.
“The Postal Service did not evaluate the impact of the proposal oncustomers who reside or conduct business in rural, remote, and non-contiguous areas,” PRC added. “Customers in rural, remote, and non-contiguous areas can be particularly affected by the PostalService’s plans.”
Goldway concluded: “The Postal Service remains a vital, beloved andimportant institution facilitating economic growth, aiding small businesses, enhancingcommunications and unifying the nation. A decision to change the existing patterns of postalcommunications and delivery should be made with care.”
Responding to the Commission’s findings, USPS said: “The Commission’sopinion is advisory only and therefore not a final determination on the merits of our proposal. Weremain convinced of our findings. As such, we will also continue to press our case with theCongress on this matter.”
