Wednesday, July 27, 2011

U.S. Postal Service Announces Big Changes, Cuts


The U.S. Postal Service on Tuesday announced closings of 3,653 post offices in hopes to restore profitability and cut back on their losses.

Postmaster General Patrick Donahoe, who took office at the beginning of the year, announced at a news conference today his plans to save the agency $200 million by the closures, according to CNN.

For several years, the Postal Service has continued to face large deficits, despite cutbacks in labor costs. They reported an $8.5 billion net loss in 2010, and $3.8 billion loss in 2009, recently exhausting their $15 billion borrowing limit.

“A lot of the decisions we make around our operations are based on the revenues that come into the operation,” Donahoe shared, as reported by the SF Gate.

“We’ve lost a tremendous amount of first class mail,” he added, according to The Wall Street Journal. “It’s down 28 percent in the last four years and that’s what pays the bills; that’s what pays for six days of delivery. As you lose that, you have to make decisions. We’re no different than any other business.”

Some of the mostly rural post offices being reviewed only average less than $50 a day in sales, with employees working less than two hours per day.

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