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Sleet and snow can't stop the Postal Service – but Saturdays can

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The schedule change, which the Postal Service is pursuing without congressional approval, marks a dramatic new step in the agency’s bid to close a yawning budget gap. The Postal Service reported an annual loss of $15.9 billion in fiscal 2012 – three times the loss recorded in 2011 – and defaulted on billions of dollars in retiree health benefits payments.

This year the agency needs to close a $20 billion budget gap. It hopes that $2 billion of that will come from ending Saturday letter delivery. Most of the projected savings would occur through a reduction in the size of the workforce by 45 million work hours, or 22,000 jobs. The agency said it planned to eliminate jobs through attrition and reducing part-time hours, not layoffs.

“This announcement today is one part of a much larger strategy to return the Postal Service to long-term financial stability,” Mr. Donahoe said. Since 2006, he added, the agency has reduced its workforce by 193,000 people, or 28 percent, mostly through attrition. It also reduced costs by $15 billion by consolidating mail processing facilities, eliminating 21,000 delivery routes, and reducing hours in more than 9,000 post offices across the country.

This year, the agency plans to turn its focus to employee health benefits, its largest expenditure. As a result of a congressional requirement imposed in 2006, the Postal Service must set aside $5.5 billion each year for 10 years – a total of $55 billion – to cover future medical costs for retirees.

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