Vincent Farnsworth 11:30 a.m., May 6
Postal Service to Slash Costs, Employees
The United States Postal Service is planning to cut 220,000 jobs, or about a third of its workforce, between now and 2015. In other cost-cutting moves, it also wants to set up its own health benefit plan, speed up planned post office closures, stop offering pensions to new hires, and reduce retirement benefits for existing employees not currently nearing retirement age.
About 100,000 of the planned cuts will come through attrition, with employees retiring or leaving the Postal Service not being replaced. But the bulk of the jobs eliminated are expected to come through layoffs. At the end of the purge, 425,000 employees will remain on staff.
The Postal Service is essentially bankrupt, running large deficits for the last several years as traditional mail circulation continues to drop. "If we were a private company, we already would have filed for bankruptcy and gone through restructuring — much like major automakers did two years ago," said a Postal Service spokesperson.
One thing that may stand in the way of plans – under collective bargaining agreements with postal unions, layoffs are not allowed under any circumstances. The Postal Service is now turning to Congress and asking for legislation removing the protections afforded postal employees through their union contracts.
"The Congress of the United States does not engage in contract negotiations with unions and we do not believe they are about to do so," said Fredric Rolando, president of the National Association of Letter Carriers in a statement critical of the Postal Service’s announcement.