Postal Service Making Cutbacks

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.

Agency spokeswoman Sue Brennan stated that post offices that got the least amount of foot traffic and retail sales would be closed, leaving nearly 3,700 cities vulnerable to the change as early as January.

Additionally, the postmaster general revealed that over the next decade, half of the 32,000 post offices would be reviewed for possible closure, WSJ reported.

Going forward with his initial pledge to restore the postal service to profitability, Donahoe promised to emerge from the cuts as a stronger organization that “delivers even greater value to the American people.”

And in an effort to hopefully curb the negative response, the agency also announced that the majority of the 3,653 post offices would turn into a “village post office,” where limited postal services would be offered at small businesses like grocery stores or gas stations.

 “Our customer’s habits have made it clear that they no longer require a physical post office to conduct most of their postal business,” Donahoe noted, in a statement. Around 2,500 may potentially qualify.

“The Postal Service of the future will be smaller, leaner and more competitive and it will continue to drive commerce, serve communities and deliver value,” he added.

But residents in the qualifying towns aren’t satisfied, even though they’ll still maintain their names and zip codes, and feel as if their area will not be the same without an actual post office.

Other proposed changes of the USPS noted by the WSJ include: restricting mail delivery to five days a week, which would purportedly save $3 billion a year, and cutting back on an annual required payment for retiree-health benefits.

Closures are expected to begin in the coming months, with some post offices already closed from earlier cutbacks. Locations that may be affected include over 100 California and New York offices, 39 Washington, D.C., offices, and 34 Florida offices.

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