USPS solvency plan has layoffs, closures

March 25, 2011 at 9:25 AM
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WASHINGTON, March 25 (UPI) -- The U.S. Postal Service said it would reduce its workforce by 7,500 positions and close seven district offices to help address losses from lower mail volume.

The reorganization was announced Thursday as a commission determined the Postal Service's plan to ax Saturday delivery would delay one in four letters by two days instead of one, The Washington Post reported.

The Postal Regulatory Commission said postal officials underestimated losses the agency would suffer from handling less mail while overestimating savings.

Postal Service officials said reductions are among the strategies needed to achieve solvency after losses of $8.5 billion in fiscal 2010. Projected losses for 2011 are $6.4 billion.

"Nobody did anything wrong, but we're a victim of the economy and past legislation," said Anthony Vegliante, the Postal Service's human resources officer and executive vice president.

Vegliante said he expects about 3,000 people to take the buyouts of $20,000 to employees over age 50 with at least 20 years of service, or employees of any age with at least 25 years of service, the Post reported.

In addition, district offices will close in Albuquerque; Billings, Mont.; Carol Stream, Ill., Columbus, Ohio; Macon, Ga.; Providence, R.I., and Troy, Mich., the Postal Service said. The closures would allow the agency to close as many as 2,000 post offices in the next two years.

"I am confident that we have developed a strong plan that takes a key step toward a leaner and less bureaucratic structure," Postmaster General Patrick Donahoe said in a statement.

The Postal Regulatory Commission found that five-day service would delay by two days delivery of 25 percent of first class and priority mail, and the Postal Service didn't adequately evaluate the effects of the reduction on rural areas.

Margaret Cigno, the commission's chief analyst, said letters normally delivered on Saturday would not arrive until Tuesday because Saturday mail wouldn't be transported and processed, the Post said.

Sen. Susan Collins, R-Maine, ranking Republican on the Senate Homeland Security Committee, which has jurisdiction over mail service, said the commission's advisory opinion indicates USPS has questions to answer before eliminating Saturday service, The Hill reported.

"Echoing my warnings, (Postal Regulatory Commission) Chairman Ruth Goldway acknowledged in her addendum to the opinion that five-day delivery would 'unfairly discriminate' against rural postal customers," Collins said in a statement. "These consequences simply must be addressed before consideration of such a significant service reduction."

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