Donahoe to cut 7,500 admin jobs at US Postal Service

Patrick R Donahoe was sworn in as the 73rd postmaster-general of the United States this afternoon, pledging to cut costs and increase revenues. Donahoe took his oath of office in front of USPS employees today promising a return to profitability for an organization that posted an $8.5 billion loss last year and is facing a $6.4 billion shortfall this year.

He said 7,500 administrative jobs would go at the US Postal Service, mainly among those who are eligible for voluntary retirement. About 2,000 of these cuts would be postmasters, others would be line supervisors.

A consolidation of the 74 USPS district offices is also to be carried out, with 10 offices to be closed.

Donahoe also stressed today the need for the US Postal Service to focus its energies on improving customer service.

“I am confident that we will emerge as a profitable, market-responsive organization that competes for customers and delivers even greater value to the American people,” he said.

USPS spokesperson Joanne Veto told Post and Parcel today that the process of cutting the workforce by 7,500 would be complex, and most likely take the rest of the fiscal year through to September.

The process is also subject to agreements with the two unions with which the USPS is still in negotiations regarding new collective bargaining agreements, the American Postal Workers Union (APWU) and the National Rural Letter Carriers Association (NRLCA).

“We’ll have a better picture of where the job cuts will be made by March,” said the spokesperson.

Pension funds

As he officially took office, the new postmaster-general and CEO of the US Postal Service reiterated his commitment to work with lawmakers in Washington to claw back the $6.9 billion overpaid into the federal pensions system.

“We are looking for every opportunity to control costs and raise revenue. We will do everything we can to ensure that money can be used by the Postal Service to prefund retiree health care or pay down debt and avoid repeating the situation we found ourselves in with the Civil Service Retirement System and prefunding retiree health benefits,” Donahoe said.

Four postal unions and two postal management organizations wrote to President Obama on Wednesday calling for him to step in to help fix the retiree healthcare overpayments.

The groups, which included the APWU and NRLCA,said the USPS would have been profitable over the past four years – even with the recession and competition from the internet – had it not been forced to pay $5.5 billion a year too much into the civil service retirement system.

The letter called for the $50-75 billion surplus within the USPS pension fund to be used to cover future payments, and asked the President to order a recalculation of USPS payments into its pension funds.

“The Postal Service can avoid short-sighted and self-defeating cuts in service to the American people without a penny in taxpayer support if you will take the actions we request,” insisted the letter to the President.


One area of positive news for the USPS announced as it officially gained its new postmaster-general today was that it has agreed a new five-year contract to provide shipping services for eBay.

The USPS said the deal sealed earlier this week will see it providing online tools and marketing programs to help millions of small businesses grow through eBay and using direct mail.

“Our alliance with eBay continues to strengthen and grow. This new contract builds on the trust the eBay community has invested in us as their leading shipper of choice,” Donahoe said.

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