US Postal Service® is proposing to cut its workforce


The United States Postal Service is the cornerstone of an industry that employs over seven million Americans. Mail service providers, fulfillment companies, shipping firms, printers, transportation companies, and “Mom-and-Pop” small business owners all combine to use the mail and generate over $1 trillion in sales and revenue for the nation’s economy. This important segment of the business world represents seven percent of the total Gross Domestic Product (GDP) in the United States.

Today, despite unprecedented cost and staffing reductions over the past decade, the Postal Service is facing the equivalent of Chapter 11 bankruptcy and the need to reorganize. While our business remains vital to the U.S. economy, we will be insolvent next month. Since 2007, the Postal Service has faced the financial strain of steep declines in mail volume and revenue, combined with increases in network costs, wages and benefits, and new legal requirements.

The financially strapped US Postal Service® is proposing to cut its workforce by 20% and to withdraw from the federal health and retirement plans because it believes it could provide benefits at a lower cost. They are talking about a reduction of 220,000 people which includes converting some to part time. The forced retirement and layoffs would be achieved in part by breaking labor agreements, a proposal that drew swift fire from postal unions.

The plan would require Congressional approval but, if successful, could be precedent-setting, with possible ripple effects throughout the government. It would also deliver a major blow to the nation’s labor movement. During the past four years, the service lost $20 billion, including $8.5 billion in fiscal 2010. Over that period, mail volume dropped by 20%. They are also talking about reducing the number of processing facilities by two thirds.

The USPS will need legislative action on the following:

• Allow the Postal Service™ to establish its own health benefits program
• Allow the Postal Service to administer its own retirement system
• Give the Postal Service the ability to adjust the size of its workforce to match operational needs and the changing marketplace.

Two Postal Service white papers provide details on these options. You can download them here.

Workforce Optimization Discussion Draft


The new legislative proposals are in addition to ones previously identified, including:

• Eliminate Congressionally mandated retiree health benefit pre-payments
• Enable the Postal Service to access Federal Employees Retirement System overpayments
• Give the Postal Service the authority to determine the frequency of mail delivery.

The Postal Service is facing dire economic challenges that threaten its very existence and, therefore, threaten the livelihoods of our employees and the businesses and employees in the broader postal industry and overall economy, of which the Postal Service continues to play a large part.

If the Postal Service was a private sector business, it would have filed for bankruptcy and utilized the reorganization process to restructure its labor agreements to reflect the new financial reality. Because this option is not available to the Postal Service, we believe that this extraordinary request is a key to securing our future and our continuing ability to provide universal service to our nation.