USPS to cut 500 jobs

DAILY BRIEFING

USPS to cut 500 jobs

An unexpected financial crisis is forcing the U.S. Postal Service to eliminate 500 positions in its Washington, D.C. headquarters, The Washington Post reported Monday.

Postal revenue has fallen well below projections this year despite January's first-class stamp rate increase. At the same time, the Postal Service has experienced rising costs from a discount promotion that had an unintended effect - a larger volume of mail being carried at lower prices. The popularity of e-mail as an alternative method of communication, particularly overseas, has also affected USPS's revenue stream, Postal officials said.

Nine locations will be closed as a result of the budget crunch. Workers at locations that place bar codes on envelopes will be replaced with computers that can recognize handwriting. Postal executives may also feel the effects of potential financial loss. If USPS fails to meet its budgeted $200 million profit goal this year, executive bonuses will be eliminated. Last year, bonuses averaged 10.5 percent.

USPS's mid-year profit was $803 million, $300 million below projections. The agency usually rapidly loses money in the second half of the fiscal year as mail volumes dip.