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USPS aims to cut a third of workforce

Aug. 11, 2011 - 06:00AM   |  
By STEPHEN LOSEY   |   Comments
Postal clerk Shun Wong waits for customers at the U.S. Postal Service Bayview Station in San Francisco, which is one of five in San Francisco that is being reviewed for closure. USPS is planning to cut 220,000 employees by 2015.
Postal clerk Shun Wong waits for customers at the U.S. Postal Service Bayview Station in San Francisco, which is one of five in San Francisco that is being reviewed for closure. USPS is planning to cut 220,000 employees by 2015. (Justin Sullivan / Getty Images)

The U.S. Postal Service is planning to cut 220,000 employees roughly a third of its workforce, and half of those through layoffs by 2015.

It also said it wants to set up its own health benefits plan for employees and stop offering a pension for new employees.

The Postal Service is essentially bankrupt and will run out of cash next month, which is forcing it to take drastic steps to cut costs. Federal Times obtained draft documents outlining the agency's plans, which were first reported by The Washington Post.

"If we were a private company, we already would have filed for bankruptcy and gone through restructuring much like major automakers did two years ago," the Postal Service said in one paper.

The Postal Service said attrition will cut 100,000 employees, but layoffs will be needed to eliminate the other 120,000 and bring its total workforce down to 425,000. However, unions' collective bargaining agreements have for decades banned layoffs, and the Postal Service said it has been unable to convince them to give up those protections during contract negotiations. So the Postal Service is asking Congress to step in and pass a law removing those layoff protections.

Fredric Rolando, president of the National Association of Letter Carriers, objected to the Postal Service's plans in a statement.

"The Congress of the United States does not engage in contract negotiations with unions and we do not believe they are about to do so," Rolando said. "Contract negotiations for NALC open Thursday, Aug. 18. USPS is free to bring these issues to the table. If they do so, we will bargain in good faith."

The Postal Service also proposes to speed up plans to close and consolidate facilities to cut costs. If it closes facilities but can't lay off employees, thousands will be left idle and the Postal Service won't be able to bring its expenses in line with revenues.

The Postal Service also said the Federal Employees Health Benefits Program doesn't meet its needs, and said it will ask Congress for permission to pull its 600,000 active employees and 480,000 retirees out of the program. The Postal Service wouldset up its own health plan instead, which it said would be simpler, more cost effective, and more in line with the private sector.

The Postal Service also wants to pull employees and retirees out of the Federal Employees Retirement System and the Civil Service Retirement System and put them into a new Postal Service Retirement Program.

But future employees would no longer receive a defined benefit pension, as CSRS and FERS employees do. They would only have a defined contribution plan, similar to a 401(k) or the current Thrift Savings Plan. It is unclear whether postal employees would remain under the TSP or would have their own defined contribution plan under the postal plan.

Existing retirees would continue to receive the same level of benefits. Current CSRS and FERS employees near retirement would receive the same level of benefits when they retire as they would have if they had stayed in their old plans.

The Postal Service said it may reduce future benefits for current FERS employees who are not near retirement.

amedici@federaltimes.com?subject=Reader Question">Andy Medici contributed to this report.

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