Postal Service to Offer $15,000 Buyouts; Mail Carriers Excluded.
Wednesday, August 26, 2009
The Postal Service announced Tuesday that is offering up to $450 million to encourage employees to quit their jobs, 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 buyout, which the Postal Service describes as a way to save up to $500 million 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 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 who are eligible to retire but have not done so, those eligible for an early-retirement program that began last year, and any full-time, part-time-regular or part-time-flexible employees willing to resign. Employees have until Sept. 25 to make their decision. Departures will be staggered depending on need, with the first wave of employees leaving Oct. 31.
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 they face an expected cash shortfall next month.
"The ongoing decline in mail volume has left us with difficulties with keeping work resources in step," spokeswoman Yvonne Yoerger said. Mail volume has dropped at least 12.6 percent this year, meaning that the Postal Service now delivers an average of 4.1 pieces of mail to each address, down from 5.9 pieces in 2000. Advances in automation have also reduced the need for employees, Yoerger said.
The Postal Service negotiated the buyout deal 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 said he had hoped for a higher bonus amount.
Burrus said he would not try to sway union members toward taking the deal or rejecting it.
"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," he said.
A spokesman for the mail handlers union declined to comment on the agreement.
The Postal Service has offered early-retirement options for more than a year, but it has not included the type of financial incentive announced Tuesday since 1992, when the option was open to almost all employees, Yoerger said.
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 expensive but underused retail locations. It has already cut more than 100 million work hours this year, equal to 57,000 positions. It also mandated a nationwide hiring freeze and salary freeze for top executives, stopped post office construction projects and closed six regional offices.