Postal service plans to slash 120,000 jobs, withdraw from federal benefits

It's the 41st anniversary of the U.S. Postal Service as an independent agency, but its employees won't be celebrating anytime soon. The Postal Service is on the verge of cutting 120,000 jobs -- 20 percent of its workforce -- and pulling out of the federal health care and retirement programs, The Washington Post reports.

A USPS notice on Thursday titled "Financial crisis calls for significant actions" informed its employees that "we will be insolvent next month due to significant declines in mail volume and retiree health benefit pre-funding costs imposed by Congress." The Post notes that in the past four years, the agency lost $20 billion and mail volume plummeted by 20 percent.

Because the downsizing would require breaking labor agreements, the proposal has already drawn fire from labor unions. Congressional approval would be required for the plan's activation, but if passed, it would be a historic--and devastating--precedent for the U.S. labor movement.

In the two draft documents outlining the USPS plan, a "Workforce Optimization" paper admits that the Postal Service is making an "extraordinary request" to break labor contracts. "However," the document argues, "exceptional circumstances require exceptional remedies.