The week that was: 25 March 2011
USPS to save through restructuring plan, Royal Mail to slash jobs, and Republicans raise doubts over labour deal… ‘The week that was’ is here to help you catch-up with the big headlines from the last seven days. Let’s start in the US.
USPS believes it will save $750m a year through a restructuring of its administrative set-up. Writing to his officers on Wednesday regarding the redesign of the service, Postmaster General Pat Donahoe said his plan would mean a 20% reduction in administrative officers and postal executives. He said changes would help the Postal Service become “leaner, faster, and smarter”, improve its financial situation and ensure it can compete for more customers. The Postmaster General is aiming to cut his administrative staff by 7,500, reducing the layers of management within the Postal Service. This could involve reduction-in-force lay-offs, but hopes to avoid this as much as possible through voluntary early retirements. With around 22,500 staff retiring each year on average anyway within the USPS, Donahoe believes he can slim down his overall workforce by a total of 30,000 this year. Over the coming weeks, targeted groups of non-unionised administrative staff within USPS headquarters, field units, area and district offices are to be offered financial incentives to take voluntary early retirement. Staff that have completed 25 years of service, or who are over the age of 50 and have completed 20 years of service, are being offered a $20,000 golden handshake to retire early. Donahoe said other staff can also claim the incentive to voluntarily leave the Postal Service, as the organisation seeks to cut staff numbers to stem its multi-billion dollar annual losses. Meanwhile, seven district offices were notified yesterday that they are closing – including offices in Columbus, South East Michigan, Northern Illinois, South East New England, South Georgia, Big Sky and Albuquerque. The USPS said the administrative functions of these districts will be assumed by nearby district offices, and that closure would not affect customer service. Donahoe said of the USPS redesign: “The new structure aligns functions with increased clarity of purpose and a dramatic reduction in ‘shadow organisations’.” He added that his plans would eliminate layers of reporting, as well as reporting between executives and within pay-grade levels. A document sent to federal regulators on Wednesday stated that the Postal Service currently has 516,187 full-time staff. Counting part-time and temporary workers, it has 660,682 staff, with the document suggesting staff have an average age of 49.
In similar fashion, Royal Mail will slash 1,700 managerial jobs and close two of its seven mail centres in London, in its latest round of cost-saving measures. The organisation confirmed plans to reduce the number of operational line managers across the UK by up to 1,000 through voluntary means. “This follows a separate review of managers in head office departments which will result in 1,700 people leaving the Group when this specific initiative concludes,” Royal Mail said. The company has reduced the number of employees by around 65,000 since 2002. In a separate measure, the phased closure of mail centres in East London and South London will commence immediately, under the 2010 Business Transformation agreement. Centres in Croydon, Greenford, Jubilee (Feltham), Romford and Mount Pleasant will remain open. The operator denied that it would need to make compulsory redundancies as a result of the closures, however it confirmed it foresees the number of employees in London dropping by 751. A statement said: “After much study and careful thought, Royal Mail believes it will not have to resort to compulsory redundancies to manage the reduction in the number of employees.” Significant reductions in the number of mail centres are also underway and around half of the 64 centres in 2010 could eventually close by 2016 or sooner. Mark Higson, managing director of operations and modernisation, said: “Royal Mail’s modernisation programme, which is vital to ensuring a successful future for the letters and parcels business, depends on having the right number of people in our business as well as deploying the right technology and equipment.”
Back in the US, House Republicans in the US Congress have expressed “serious doubts” about a new labour agreement between the US Postal Service and the American Postal Workers Union. The deal on the 2010-2015 collective bargaining agreement was reached last week, after months of negotiation with the union leadership, and still requires the union members to ratify it. A postal ballot is due to be held from next month, with votes to be counted May 11. The agreement was based on a 3.5% increase in wages, deferred a year along with cost-of-living allowances to help the Postal Service with its cash flow problems. But while left-wing critics have suggested the deal gives too much to the USPS management, particularly in terms of wage cuts for new workers and reduced healthcare contributions, Republican Congressman Darrell Issa said Wednesday he believed it did not do enough to help the Postal Service improve its financial situation. The Congressman from California has announced a full hearing is to take place next month in front of the House Oversight and Government Reform Committee, which he chairs, for both the USPS and APWU to explain the agreement. He said 80% of the Postal Service operating expenses were workforce-related, and that costs had to be cut to cope with falling mail volumes and projections of declining revenues at the USPS. “The union contract renewals are the best chance to find new savings,” said Issa. “Unfortunately, this looks like a missed opportunity. The Postal Service must show Congress and the American people that it can pay its own way, because the numbers do not seem to add up.”
And finally…
The Mail & Express Delivery Show – or MEDS, as it is more affectionately known – is returning to London on 7 April. Want more details? Of course you do. This way!
