March 24, 2011

The U.S. Postal Service Will Cut 7,500 Managers And Shut Seven District Offices!

The Wall Street Journal
written by Jennifer Levitz
Thursday March 24, 2011

The U.S. Postal Service will cut 7,500 managers and shut seven district offices, responding to record losses and declining mail volume as more people communicate by e-mail and texts and pay bills online.

The reduction in postmasters, supervisors and other employees represents a 20% cut in middle-management jobs—people not involved in actual physical moving of mail.

The cuts come as part of the agency's previously disclosed plan to close as many as 2,000 post offices and consolidate regional mail-processing centers in the next 12 months.

Besides the fundamental changes in the way the public communicates, the Postal Service is overwhelmed by burdensome retiree health-benefit costs, according to U.S. Postmaster General Patrick Donahoe.

"It's critical that we adjust our work force to match America's changing communication trends, as mail volumes continue to decline," he said in a statement. "At every step and with every change, our focus remains on our customers and continuing to provide outstanding customer service."

District offices, which oversee and provide services to groups of post offices, will close in Columbus, Ohio; Albuquerque, N.M.; Billings, Mont.; Macon, Ga.; Providence, R.I.; Troy, Mich.; and Carol Stream, Ill., the Postal Service said.

The agency has not yet identified post offices that will be closing, but has said previously that it was focusing on rural areas where post offices are losing money, and where residents may have access to services in another town.

Still, postmasters play important roles in small communities, said the National League of Postmasters of the U.S.

"Especially in rural areas, the post office is the only face of the federal government in the community," and the postmaster is "an integral part" of daily life, said John Jameson III, executive vice president of the group, in an interview.

"In the very smallest offices, in most cases they are the only employee so they are actually interacting with customers every single day," he said.

Of the 7,500 jobs to be lost over the next year, 2,500 are supervisors, 2,000 are postmasters, and the rest are in administrative roles.

Slashing managers and closing district offices will save $750 million annually, postal officials said. The plan is the latest attempt by the Postal Service to right itself after losses of $8.5 billion in fiscal 2010; the agency projects it will be $6.4 billion in the red this year.

In addition to the 2,000 post offices it expects to start closing in coming months, the Postal Service is reviewing another 16,000—half of the nation's post offices—that are operating at a deficit. It also has been lobbying Congress to make it easier to close money-losing facilities.

The agency is also seeking to drop to five from six-day delivery. That move would need congressional approval, however, and faces wariness from the Postal Regulatory Commission, which said in an opinion Thursday that cutting Saturday delivery would disproportionately affect people in rural and remote areas.

The Postal Service, an independent government entity supported mostly by postal fees, has had to borrow from the federal government to meet shortfalls and expects to max out its $15 billion federal line of credit by the fall.

Since 2007, U.S. law has required the Postal Service to prefund retiree health benefits at $5.5 billion a year—a law that the Postal Service is now seeking to change.

Mr. Donahoe testified to a congressional subcommittee in early March that the Postal Service "will not survive as a self-financing entity without significant changes to current law."

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