An announcement today from the U.S. Postal Service: send that birthday card a day earlier, your first class mail is going to take longer to reach its destination.
The Postal Service is shutting slightly more than half of its 461 processing centers as early as March 2012. That will mean slower first class mail delivery, taking 2-3 days rather than the current 1-3 days.
The cuts will save about $3 billion and help the quasi-governmenatal agency avert bankruptcy, it said. The Postal Service is on the hook for $5.5 billion for retiree health benefits, and it’s staring down a total budget shortfall of more than $14 billion next year.
Shutting down the processing centers will cost 28,000 people their jobs, and that’s on top of the 70 000 people losing their jobs with the planned closure of 3,700 post offices nationwide. The Postal Service employed more than 580,000 people in 2010, and is the second largest civilian employer, just after Wal-Mart.
Postmaster General Patrick Donahoe said the agency must make cuts of $20 billion by 2015 to be profitable. He also said its business model is failing, and argues that he can’t continue to run the business in the red.
The annual report (PDF) shows operating revenue of $67 billion in 2010, expenses of $75 billion, and a loss of $8 billion. Its operating margins have deteriorated over several years, from negative 3.7 percent in 2008, to negative 12.4 percent in 2010.