Postal Service: 7,500 workers, $20,000 buyouts

postal_worker.top.jpg By Charles Riley, staff reporter


NEW YORK (CNNMoney) -- The Postal Service is offering a $20,000 buyout to thousands of veteran workers as part of its bid to eliminate 7,500 administrative jobs, the agency announced Thursday.

The struggling agency also announced plans to shutter seven district offices.

The seven offices that are closing are Columbus, South East Michigan, Northern Illinois, South East New England, South Georgia, Big Sky and Albuquerque.

There are 421 jobs spread across the seven offices, a postal service spokeswoman said. Eligible administrative employees will be offered the buyout package -- letter carriers and other union workers are not eligible.

The postmaster first announced plans to cut 7,500 positions in January, but it wasn't clear where those jobs would be cut, or when. The buyout offer is designed to entice workers to leave the workforce.

Each year, about 20,000 Postal Service workers retire or leave their jobs. But many of those positions are filled. By eliminating 7,500 administrative positions over the next year, the Postal Service should be able to accelerate the shrinking of its workforce.

Employees must be 50 years old, with at least 20 years of service, or any age with at least 25 years of service to qualify.

"I am confident that we have developed a strong plan that takes a key step toward a leaner and less bureaucratic structure," Postmaster General Patrick Donahoe said in a statement.

But with more than 500,000 employees, the cuts are a drop in the bucket

Struggling with a decrease in mail volume, the agency said its net loss totaled $8.5 billion in 2010. That compares to a loss of $3.8 billion the prior year.

When fully implemented, the Postal Service estimates the cuts will lead to about $750 million in annual savings.

"It's critical that we adjust our workforce to match America's changing communications trends as mail volumes continue to decline," Donahoe said.

The agency also plans to close as many 2,000 post offices over the next year, which will mean 2,000 fewer postmasters on the job. The agency has not yet identified which post offices will be closed.

Already, the agency estimates it has saved $9 billion over the past two years. Those savings came primarily from the elimination of 105,000 full-time positions.

The organization has also asked Congress to allow it to scale back to five-day delivery, cutting Saturdays, and to discontinue its "unique" requirement to pre-fund its retirement fund -- something no other federal agency is required to do.  To top of page

Frontline troops push for solar energy
The U.S. Marines are testing renewable energy technologies like solar to reduce costs and casualties associated with fossil fuels. Play
25 Best Places to find rich singles
Looking for Mr. or Ms. Moneybags? Hunt down the perfect mate in these wealthy cities, which are brimming with unattached professionals. More
Fun festivals: Twins to mustard to pirates!
You'll see double in Twinsburg, Ohio, and Ketchup lovers should beware in Middleton, WI. Here's some of the best and strangest town festivals. Play
Index Last Change % Change
Dow 16,408.54 -16.31 -0.10%
Nasdaq 4,095.52 9.29 0.23%
S&P 500 1,864.85 2.54 0.14%
Treasuries 2.72 0.08 3.19%
Data as of 5:14am ET
Company Price Change % Change
Bank of America Corp... 16.15 0.00 0.00%
Facebook Inc 58.94 0.00 0.00%
General Electric Co 26.56 0.00 0.00%
Cisco Systems Inc 23.19 -0.02 -0.09%
Micron Technology In... 23.91 0.00 0.00%
Data as of Apr 17
Sponsors

Sections

Spencer has been a supporting member of the "Good Morning America" cast for the past three years. More

Obamacare sign ups hit 8 million, though final enrollment remains to be seen. More

Office for iPad move is a symbolic victory for Nadella's Microsoft, but the company is still weighed down by many of the same old issues. More

Schwinn, Trek and Cannondale are all iconic American bicycle brands. But none of them are made in the United States. More

As Detroit moves closer to reaching a bankruptcy deal, retired civilian workers are poised to be left worse off than firemen and police officers. More

Market indexes are shown in real time, except for the DJIA, which is delayed by two minutes. All times are ET. Disclaimer LIBOR Warning: Neither BBA Enterprises Limited, nor the BBA LIBOR Contributor Banks, nor Reuters, can be held liable for any irregularity or inaccuracy of BBA LIBOR. Disclaimer. Morningstar: © 2014 Morningstar, Inc. All Rights Reserved. Disclaimer The Dow Jones IndexesSM are proprietary to and distributed by Dow Jones & Company, Inc. and have been licensed for use. All content of the Dow Jones IndexesSM © 2014 is proprietary to Dow Jones & Company, Inc. Chicago Mercantile Association. The market data is the property of Chicago Mercantile Exchange Inc. and its licensors. All rights reserved. FactSet Research Systems Inc. 2014. All rights reserved. Most stock quote data provided by BATS.