Postal Service Reducing Workforce, Offices as Mail Volume Falls - Bloomberg.com
By Todd Shields

March 21 (Bloomberg) -- The U.S. Postal Service said it will offer early retirement to about 150,000 workers, close administrative offices and eliminate more than 3,000 jobs to help resolve a financial crisis as the volume of mail declines.

Stamped mail is down to 1964 levels, officials said, contributing to a deficit that reached $2.8 billion in 2008 and is likely to be larger this year.

Business at the post office has dropped as economic activity slows and people and businesses turn to e-mail and electronic billing and payment, postal officials have said. The service yesterday said there are “no signs of economic recovery in sight.”

About 150,000 of the service’s 646,000 workers will be offered early retirement, the service said in a statement.

The agency also is closing six district offices that together have “a little over 500” positions, spokeswoman Sue Brennan said in an interview. The targeted administrative offices are in Lake Mary, Florida; North Reading, Massachusetts; Manchester, New Hampshire; Edison, New Jersey; Erie, Pennsylvania; and Spokane, Washington, officials said. The closings will not affect customer service, the service said.

An additional 1,400 employees in the remaining 74 district offices will be eliminated, Brennan said. More than 1,400 mail- processing supervisory and management jobs also are being eliminated, Brennan said.

‘Steady Erosion’

Postmaster General John Potter in January told Congress that the Postal Service has been harmed be a “steady erosion” of profitable first-class mail. On Feb. 4 the service reported a first-quarter loss of $384 million on the eighth consecutive quarter of lower mail volume.

In the past year the service has taken “very aggressive cost-cutting actions,” including a nationwide hiring freeze and halting construction of new postal facilities, according to the statement.

Potter asked Congress in January to let the Postal Service reduce its six-days-a-week delivery schedule by one day to save money.

Beginning May 11, the price of a first-class stamp is to rise to 44 cents from 42 cents, the Postal Service said Feb 10.

To contact the reporter on this story: Todd Shields in Washington at [email protected]

Last Updated: March 21, 2009 00:00 EDT