US Postal Service Plans Job Cuts; 800 Headquarters Posts Targeted; Thousands More Possible

Facing a deficit of more than $1 billion this year, Postmaster General Jack Potter yesterday announced the immediate elimination of 800 headquarters jobs and an overall 30 percent reduction in regional management staff around the country over the next several months that could result in several thousand more job cuts.

His management reorganization plan also calls for the closing of regional management offices in Shirlington and St. Louis. Potter further promised to take a "hard look" at all of the U.S. Postal Service's business ventures, including its recent forays into e-commerce services such as online bill payment.

"These changes will enable us to better serve the American people by establishing a management structure that's leaner and more easily understood," he said.

USPS officials would not specify how the 800 headquarters jobs would be cut. Spokeswoman Judy de Torok said the cuts would come from a combination of eliminating positions, attrition and early retirements. Officials also offered no estimate for the savings associated with the changes.

Not all the "headquarters" jobs are in the Postal Service's main L'Enfant Plaza office; management employees may be based in regional or other offices and still be considered "headquarters" employees. Postal officials did not specify how many of the 800 job cuts would come from the Washington office.

Potter's announcement came as the Postal Service continues to predict large losses for the current fiscal year in the face of a slowing economy, increased fuel and labor costs, a widening delivery network and heavy competition from e-mail and other Internet services.

After early predictions of losses as high as $3 billion for the year, the post office now expects to lose closer to $1.6 billion, following a pair of rate increases, a freeze on capital construction and other cost control measures. Postal officials are expected to request another rate increase this fall.

The Postal Service is an independent federal agency that operates without direct taxpayer subsidy and is expected to break even over time. It pays no state or federal taxes and may borrow money directly from the federal treasury, unlike private delivery companies.

It is also one of the largest employers in the United States, and the proposed job cuts represent only a tiny fraction of the estimated 850,000-strong postal workforce. The last large reduction in postal management came in 1992, when then-Postmaster General Marvin T. Runyon announced an effort to cut some 30,000 jobs.

Some critics of the Postal Service yesterday described the reduction as a largely symbolic gesture intended to win a measure of goodwill from a skeptical Congress and to pave the way for a significant rate increase request. Some critics, both inside and outside the agency, criticized Potter for not bringing in any new managerial talent to help turn around the flagging agency.

But others praised yesterday's announcement, saying that any attempt the Postal Service makes to improve its bottom line through internal reforms is a good one.

"We are pleased as punch, especially if this moves them towards cost containment. They absolutely should be looking at cutting costs first before going after any kind of rate increase," said Louis Mastria, spokesman for the Direct Marketing Association, which represents bulk advertising mailers.

In addition to the job cuts and office closings, Potter said he would implement a new marketing organization to be headed by Anita Bizzotto, a longtime USPS executive. The new marketing office will be responsible for developing new services and products and managing pricing and sales.

While some postal observers expect the agency to jettison e-commerce ventures entirely, Potter yesterday only promised to examine them along with the rest of the Postal Service's business initiatives. Previously he has said he will focus on the post office's core business, delivering first-class mail.

"I will take a close look at our e-commerce activities and we will retain those that support growth of our core business and others that are profitable," he said.

WASHINGTON POST, 08th September 2001