Postal Service Offers Employees Buyouts to Quit

The Postal Service is offering up to $450 million to employees if they will agree to quit their jobs, it announced Tuesday, the latest effort by the financially struggling agency to reduce its costs amid a sharp decline in mail volume.

Up to 30,000 employees can take the $15,000 bonus, which the Postal Service describes as a way to save up to $500 million in savings during the next fiscal year, which begins in October.

The offer is available to Post Office retail clerks, distribution center mail handlers and clerks, and motor vehicle technicians. Letter carriers are not eligible, since the Postal Service is targeting only areas where it has an excess of workers, and the number of addresses grows on average by 1.5 million each year, according to the agency.

Eligible employees would receive $10,000 this October and $5,000 in October 2010. The offer extends to employees already eligible for retirement that have not chosen to do so, those already eligible for an early retirement program that began last year and any full-time, part-time regular or part-time flexible employees willing to voluntarily resign. Employees have until Sept. 25 to make their decision. Departures will be staggered depending on need, with the first wave of employees retiring on Oct. 31.

“The ongoing declining mail volume has left us with difficulties with keeping work resources in step with the declining mail volume,” spokesman Yvonne Yoerger said, since less mail means less of a need for workers. Mail volume has dropped 12.6 percent so far this year, meaning that it now delivers an average of 4.1 pieces of mail to each address, down from 5.9 pieces in 2000. Advances in automation technology have also reduced the need for employees, Yoerger said.

The Postal Service negotiated the deal announced Tuesday with the American Postal Workers Union and the National Postal Mail Handlers Union.

“We have to have a balance between work hours and volume. We had more people than we have mail, and there had to be an adjustment,” said APWU President William Burrus. Though he helped negotiate the agreement, he had hoped for a higher bonus amount and said he will not actively sell the plan to his union’s members.

“I’ve got a very intelligent cadre of employees that I represent and I would not put myself on a plateau and try to sell them anything. I offer it to them for their consideration.”

A spokesman for NPMHU declined to comment on the agreement.

The Postal Service has been offering early retirement options for more than a year, but without the additional financial incentives announced Tuesday. It has not offered incentives of this kind since 1992, when the option was open to almost all employees, according to Yoerger.

The Postal Service lost $2.4 billion during its third quarter and forecasts a $7 billion year-end loss, according to figures released earlier this month. The financial woes can be tied in large measure to roughly $7 billion in mandated payments to fund current and future retiree health benefits. Postal officials say they will not make the payments for future retiree benefits if it faces an expected cash shortfall next month.

The decision to offer buyouts comes amid several other cost-cutting moves. The Postal Service may close about 300 post offices across the country, mostly in dense urban areas, while selling off other expensive, but underused retail locations. It has already cut more than 100 million work hours this year, equal to 57,000 positions. It mandated a nationwide hiring freeze and salary freeze for top executives, stopped post office construction projects and closed six regional offices.

Author: Paola