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Postal Service considers 120,000 layoffs

Associated Press / August 12, 2011

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WASHINGTON - The financially strapped US Postal Service is considering cutting as many as 120,000 jobs.

Facing a second year of losses totaling $8 billion or more, the agency also wants to pull its workers out of the retirement and health benefits plans covering federal workers and set up its own benefit systems. Congressional approval would be needed for either step, and both could be expected to face severe opposition from postal unions, which have contracts that ban layoffs.

The Postal Service has cut 110,000 jobs over the past four years and is currently eliminating 7,500 administrative staff. In its 2010 annual report, the agency said it had 583,908 career employees.

Postal officials said they will be unable to make a $5.5 billion payment to cover future employee health care costs that is due Sept. 30. Because of the way government finances are counted, eliminating the payment would make the federal budget deficit appear $5.5 billion larger.

Postal officials have sought congressional help in recent years, including requests to end Saturday delivery, and several bills have been proposed, but none has been acted on.

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