More than a quarter-million U.S. Postal Service workers are eligible for retirement, and a restructuring plan proposed Thursday relies heavily on getting many of them to quit.
Joseph Corbett, chief financial officer for the Postal Service, told reporters in a conference call the agency needs to reduce its workforce by 155,000 employees by 2016. It’s just one of several big changes postal officials say they must make amid sharply declining first-class mail volume and years of multibillion-dollar deficits.
If officials do nothing, Mr. Corbett said, the Postal Service would face annual deficits of more than $18 billion by 2016.
“We don’t want to be a burden on the taxpayers,” he said.
Among other proposals, the Postal Service wants to break free from the federal government’s health plan and eliminate Saturday home delivery. The plan, sent to members of Congress on Thursday, also notes that raising the price of stamps to 50 cents could help raise up to $1 billion.
In a letter to members of Congress on Thursday, U.S. Postmaster General Patrick R. Donahoe said that, without reforms, ongoing losses would cause the Postal Service to become a “long-term burden” to taxpayers. He called such an outcome “highly undesirable and entirely avoidable.”
Postal officials blamed the money troubles on loss of first-class mail revenue as more people turn to the Internet to pay bills and communicate. Citing one example, Mr. Corbett said more than half of all Americans paid their taxes electronically last year.
Because first-class mail is the major source of revenue, growth in the Postal Service’s shipping business hasn’t been enough to help offset the overall losses, officials said.
Mr. Corbett gave few details on how the Postal Service plans to shed so many jobs, but said many workers would retire through attrition. And he did not rule out the possibility of buyouts. He said the Postal Service has never had significant layoffs before, adding that officials believe the reduction is possible “by other means.”
The Postal Service doesn’t rely on taxpayer funding for operational expenses, but borrowed from the U.S. Treasury as finances worsened in recent years. In his letter, Mr. Donahoe said the Postal Service proposal would provide for full repayment of the $12.9 billion owed to the Treasury Department.