Post office to cut 8,000 more workers, still faces major deficit

Tuesday, May 7th 2002, 12:00 am
By: News On 6

WASHINGTON (AP) _ More than 8,000 additional full-time jobs will be cut by the Postal Service this year as the agency struggles to contain its losses in the face of declining business.

Postmaster General John Potter said Tuesday that a total of 20,000 career positions are being eliminated this year, all through attrition. About 11,800 positions have been cut so far.

Potter told the Postal Service's governing board that financial managers are projecting a loss of $1.5 billion for the fiscal year that ends in September.

That may, in effect, represent good news, since previous loss projections for this year have ranged as high as $4.5 billion.

The post office is facing an unprecedented drop in business that began last year with the recession. It posted a $1.7 billion loss last year.

Potter said mail volume for this year is expected to be 6 billion items fewer than last year, when the post office delivered 207.5 billion pieces. That was down from 207.8 billion the year before.

The postal rate increase scheduled for June 30 is expected to boost income for the agency _ first-class stamps will rise 3 cents to 37 cents.

In addition to the cuts in personnel, the agency has reduced spending and frozen most construction projects, helping hold the losses to the now anticipated $1.5 billion.

In addition to falling mail volume, the Sept. 11 attacks followed by the anthrax-by-mail terrorism have cost the agency hundreds of millions of dollars. And it is now engaged in a costly search for whoever is placing bombs in rural curbside mailboxes.

While Congress voted $500 million to assist in coping with the anthrax attacks and initiating efforts to prevent such future contamination, the post office does not receive tax money for its operations. It is expected to pay its own way from postage collected, making a profit in some years and posting a loss in others.

With about 750,000 employees, the post office has the nation's second- largest civilian work force, after Wal-Mart.

Also Tuesday, postal chief technology officer Charles Bravo told the board that the agency is modernizing its internal computer systems, a change that should save as much as $200 million over five years.

Bravo said the current 85 local computer help desks will be consolidated into one central location; 270 software packages used across the agency are being reduced to 60; 13,000 computer servers will be reduced to 1,500; and some 800 contractor positions are being cut.

And the board approved expanded use of Postal One, a computer system that eliminates paperwork in the acceptance, handling and billing for bulk business mail. The system has been tested with 71 major mailers and will now be expanded to other businesses.