GovernmentExecutive.com

The U.S. Postal Service has indefinitely frozen all hiring, promotions and other personnel changes in its latest response to a worsening financial position.

"A freeze on all organizational structure changes is effective immediately," USPS Chief Human Resources Officer Anthony Vegliante wrote in a Wednesday memorandum to agency officials. "The freeze includes position upgrades, additions to complement, position neutral exchanges, and requests for new positions."

A postal service spokesman confirmed the memo amounts to a hiring freeze.

In an unusual meeting Monday, Postmaster General John Potter briefed the leaders of large postal unions and managers' associations on the freeze, people familiar with the meeting said.

Postal officials are expected to brief the Postal Board of Governors on Wednesday.

"This is a big one. ... This is a very important and dramatic step," said one postal expert who said Potter's meeting with union heads appeared aimed at heading off opposition.

The freeze follows the Postal Service's decision last month to offer early retirement to up to 130,000 clerks, mail handlers and supervisors, and comes amid increasingly dire warnings about the agency's economic outlook. USPS froze hiring at its headquarters last March.

The self-supporting organization for years has worked to cut costs while finding new revenue sources. It faces stiff private-sector competition on some products and an Internet-driven nosedive in mail volume.

Mail fell this year by a greater than expected 9 billion pieces, Potter told a gathering of industry employees last week. At the same time, the postal service faces a "perfect economic storm" of fluctuating oil prices, rising paper prices, financial market instability that create the "most difficult time since the 1960s," Potter said.

The postal service has said it may lose $2 billion this year, but some analysts guess the final figure will be higher, citing new figures that show a $960 million loss in August.

The organization is likely to seek a significant postal rate increase next year, two industry observers said.

A postal service spokesman said the organization's financial woes are part of the broader economic slowdown. "We are not alone in this problem we are experiencing," he said.