The U.S. Postal Service is fighting for its life.
The post office announced it's implementing nearly $3 billion in service cuts to avert bankruptcy — just one step of a larger cost-cutting plan. Mail will still be delivered, but it's going to take a little longer to arrive at its intended destination. Almost half of the 500 mail processing centers around the country will be closed as soon as next March and 3,700 local post offices are scheduled to shutter their doors to the public — moves that will effectively terminate 100,000 postal employees. The post office expects to report a record loss of $14.1 billion this year and owes billions of dollars to the Treasury Department for retiree health benefits.
A leaner and revamped post office should not be viewed negatively, Henry tells Aaron in the accompanying clip.
"It's the right thing to restructure," Henry says. "What the market is saying to the post office is you've got to get more efficient."
The need to mail checks, bills and cards has become almost antiquated with the explosion of electronic banking and e-cards (but who doesn't love a hand-written card in the mail??). As a result, the postal service has been forced to raise the cost of a first-class stamp 33% since 2000 — and another 1-cent increase begins Jan. 22. (for those who haven't visited their local post office or mailbox lately, it will now cost $0.45 to mail a letter).
Will the big cutbacks and layoffs translate to a more competitive and productive post office? Postmaster General Patrick Donahoe has said the agency must reduce $20 billion in costs by 2015 to make a profit and the announced cuts are just the tip of the iceberg. The postal service hasn't ruled out cancelling Saturday delivery or slashing health care and labor costs. I think most of us can agree that the post office, despite its flaws, is a national institution that deserves to be saved.