Postal plants to shrink, 28,000 jobs at stake

Postal plants to shrink, 28,000 jobs at stake
United States Postal Service

POSTED: Thursday, May 17, 2012 - 1:00pm

UPDATED: Thursday, May 17, 2012 - 1:04pm

The U.S. Postal Service announced on Thursday it's moving forward with a $2.1 billion cost-savings plan to consolidate postal plants over the next two years, with consolidations starting in July.

The cuts will be limited in 2012, with 48 plants slated to be consolidated or closed in July and August, which will only impact 5,000 employees. However, when the plan is fully implemented at the end of 2014, 229 plants will be consolidated or closed and 28,000 jobs will be gone.

To customers, the consolidation plans will mean slower mail delivery for the most commonly sent mail. Overnight service is being phased out, but agency officials say letters being sent locally should still just take a day.

Even with the slower delivery, they say that 80% of first-class mail, which most consumers use, will continue to be delivered on time in 2012.

"These changes are a necessary part of the plan to reduce costs and return the Postal Service to financial stability," said Megan Brennan, chief operating officer for USPS.

Last week, the Postal Service announced it was pulling back on plans to close thousands of rural post offices, saying these post offices would instead offer shorter hours.

The Postal Service also reported a $3.2 billion loss for the three months of 2012 ended March 31, which was due to the recession, declining mail volume and a congressional mandate to prefund retirement health care benefits.

The Postal Service is, by law, an "independent establishment" of the executive branch. The agency doesn't normally use tax dollars for operations, but it has a $12 billion loan from Treasury to stem the tide until it can get back in the black.

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