The United States Postal Service has strived to make continuous efforts at decreasing their costs. In attempts to stay financially afloat, the company decided that they would offer employees the opportunity to take a monetary offer in exchange for their employment. The incentive to encourage employees to retire early is part of the company's recent goals to cut its workforce down significantly by 150,000 employees.
Patrick R. Donahoe, Postmaster General and Chief Executive Officer of the United States Postal Service states, "Given that the Postal Service is currently projecting a $14 billion net loss in Fiscal Year 2012, and continuing annual losses of this magnitude, we simply cannot justify maintaining our current mail processing footprint."
A large part of the decision to lay off employees comes from the Postal Service having much more employees than is necessary for the amount of mail that they have.
"We simply do not have the mail volumes to justify the size and capacity of our current mail processing network. To return to long-term profitability and financial stability while keeping mail affordable, we must match our network to the anticipated workload," adds Donahoe.
The Unites States Postal Service is offering approximately 45,000 employees a $15,000 buyout that will be made available to mail handlers with full time positions. Part time employees are also encouraged to take the offer, but on a prorated basis. The buyout is voluntary and offered to those who agree to take part in it by July 2. The terms of the buyout entails that those who agree to it leave or retire from their jobs by August 31.
According to the U.S Postal Service their action to buyout employee contracts will lead to a decrease of approximately 28,000 employees and will ultimately result in approximately $2.1 billion in cost cuts annually.
The consolidation is said to be taken in two phases. It is planned to target a total of 229 postal facilities and to be fully completed by late 2014.
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