Citing a dramatic turnaround in the financial affairs of the U.S. Postal Service, which had been losing more than $1 million a day, Postmaster General Paul N. Carlin has ended pay cuts he and 30 top officials took in July and announced a 3.2 percent pay raise for 700 other managers effective Sunday.
Postal Service officials said yesterday that most of the savings had been achieved by reducing overtime. In midsummer, they said, overtime was running $79 million over budget. But during the last accounting period, which ended in August, overtime was $29 million under budget, they said.
That and other savings produced a surplus of $7.2 million during the most recent accounting period, rather than the $79 million deficit that had been projected, officials said. Approximately 81 cents of every dollar the Postal Service takes in goes for labor costs, according to officials.
In a letter to postal officials Sept. 20, Carlin cited their "superb performance" in cutting costs and said he is "cautiously optimistic" that the Postal Service can break even in the 1986 fiscal year that begins next month.
Carlin had ordered the 3 1/2 percent cut for himself and other executives two months ago and delayed pay raises due other top managers to help make them aware that the largest federal agency -- which depends on customer revenue rather than congressional subsidies -- was, as he put it, "hemorrhaging red ink."
During the first nine months of this fiscal year, the service lost $288 million, Carlin said in July. He predicted that it could lose even more in August and September, despite the fact that mail volume was up. A 2-cent increase in the price of first-class stamps, instituted in February, had not stemmed the losses, he said.
In addition to the largely symbolic pay cuts and the grounding of the Postal Service's executive jet, Carlin told managers to cut back on hiring and overtime. From October 1984 until July of this year the number of postal employes had increased from 702,000 to 740,000.
In a separate action, Carlin also has recently directed top postal officials to "eliminate some layers of management" at postal headquarters here, which has a staff of 3,100, and to delegate more authority to regional and local offices. This will mean that some postal officials will be transferred from Washington and that some jobs here will be abolished.