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“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.
As such, the agency’s biggest cost-saving potential may not be related to service changes but to addressing legislation concerning retiree health payments. Donahoe said he plans to work with Congress to resolve the agency’s health-care costs, and would like Congress to enable the Postal Service to establish its own health-care plan.
Other cost-cutting measures include consolidating mail-processing centers and trimming post office hours, says Sue Brennan, a spokeswoman with the USPS. “We’re not closing post offices; instead we are reducing hours at our smallest offices,” she says, adding that the Postal Service is “encouraging small-business owners to open village post offices,” in which local businesses offer select postal products and services to complement those offered at traditional post offices.
Nonetheless, dropping Saturday mail delivery remains the agency’s most high-profile move. Surveys by the Postal Service and major news organizations indicate that some 70 percent of Americans support the switch to five-day delivery as a way for the Postal Service to reduce costs.
Art Schwartz of Guttenberg, N.J., is among them. “Obviously, I’d rather get mail Saturdays, but I’d also rather the post office doesn’t go bankrupt,” he says outside an Edgewater, N.J., post office Wednesday. “If what they’re doing is going to save post offices, then go ahead and eliminate Saturday deliveries. I don’t see it as a major disruption.”