Faced with losses that could near $1.5 billion this year, the U.S. Postal Service is offering early retirement to thousands of clerks, mail handlers and supervisors.
The push to cut costs involves retirement offers to workers 50 and older who have 20 years of service and employees of any age who have 25 years of service. The agency began the fiscal year last Oct. 1 with 684,762 career employees, down from 696,138 a year earlier.
Anthony J. Vegliante, the Postal Service’s vice president for human resources, said Wednesday that as many as 130,000 workers may be eligible for the offers, some of which are already in the mail. He declined, however, to predict how many would accept them.
“Because of the economy,” Mr. Vegliante said, “we are continuously looking at right-sizing the organization.”
The retirement offers, approved by the federal Office of Personnel Management, also can be extended to headquarters personnel.
Besides reducing staff, the Postal Service is seeking to consolidate or close mail handling facilities because of declining mail volume. The agency earlier had proposed having a private company operate its bulk mail centers across the country.
This may not be easy; members of Congress often oppose the closing of offices, as do unions.
The volume of First Class mail, the top income source, declined by more than 3 billion items in the first nine months of this fiscal year as both individuals and businesses continued to turn increasingly to electronic communications. Other mail categories were also down.
But at the same time, the nation’s growing population and business community is producing roughly 1.8 million new places each year that mail must be delivered to six days a week.
Postal reorganization legislation enacted in 2006 made it easier for the Postal Service to raise rates annually, but it limited increases to the rate of inflation. And the law does not provide for a surcharge to cover high fuel costs. With its massive fleet of vehicles, every extra penny in the price of a gallon of gasoline costs the agency $8 million.
Not only that, the Postal Service does not get a tax subsidy for its operations.
William Burrus, president of the American Postal Workers Union, is urging his members to delay making a decision as long as possible on the early retirement offers. He pointed out in a message to union members that they do not include any incentives and noted that leaving early would reduce workers’ retirement benefits.
The union said it has been told that future offers will be extended to maintenance workers and letter carriers as well.