The U.S. Postal Service plans to cut its workforce by about 9,000 jobs by 2004 as part of an initiative to save $4 billion over the next four years.
The immense popularity of e-mail and the mailing industry's opposition to raising postage rates were cited as the major reasons behind the downsizing. The agency will eliminate jobs primarily through attrition and hiring freezes. In addition to this recent downsizing, 11,000 other USPS jobs still remain vacant after two years.
"We are barely keeping our heads above water. We are facing declining margins," said Postmaster General William J. Henderson in a recent speech at the National Postal Forum in Nashville. The Postal Service does not receive any tax revenues, and the agency is required by law to break even over the long term.
Henderson estimated that the bulk of the savings over the next four years will be achieved through reducing paperwork and getting "breakthrough" productivity out of the Postal Service's processing system.
"Breakthrough productivity means reducing costs through everything from machine utilization, to standardized processes, to staffing and scheduling, and to resource management," Henderson said.
Business mailers have bristled at proposed postage increases. Henderson told mailers at the forum that the job cuts will not preclude future hikes in postage rates-emphasizing that an increase in mail volume coupled with associated revenue is essential for growth.
"Opportunities for growth lie in the global embrace of e-commerce; there is no question about that. But don't write off hard copy mail just yet."