On Thursday, February 23, the United States Postal Service (USPS) revealed the results of an internal audit focused on cost cutting that began in September. Following the survey’s recommendations, the USPS announced it will close over 200 mail processing plants, eliminating as many as 35,000 positions in the process.
As part of the proposal endorsed by President Obama in September, the postal service reviewed many of its 461 mail processing sites for possible consolidation or elimination to increase cost efficiencies. Of the 264 facilities involved in the study, 223 were selected for merging or closure. Elimination of those sites would see 30,000 full-time and 5,000 part-time positions terminated. Another six facilities will be subjected to further internal study before a decision is made on their status.
“These changes are a necessary part of a larger comprehensive plan developed by the Postal Service to reduce operating costs by $20 billion by 2015 and return the organization to profitability,” the USPS said in the announcement. The organization, which is self-funded, will realize $2.6 billion in cost reductions as a result of the closures.
The elimination of the processing plants is expected to increase delivery time for many less-centralized locations. In addition to the closures, the postal service also announced it would discontinue next-day delivery service and adjust standards for First Class mail.
The postal service ended the fiscal year 2011 with a $5.1 billion dollar loss, prompting Congress to defer a $5.5 billion payment on the organization’s retirement package to September 2012. It was the third time the payment had been pushed back that year. Earlier this month, the USPS posted another $3.3 billion loss for the quarter.
The USPS may begin closing plants in May. As part of the agreement with Congress in December, the postal service may not close any more facilities or eliminate any more positions until May 15.
For more information on the closures, as well as a full list of impacted facilities, visit the USPS Area Mail Processing study website.
