U.S. Postal Service Slashing 35,000 Jobs

The United States Postal Service on Thursday said up to 35,000 jobs would be cut as part of a larger plan to save $20 billion in operating costs by 2015 and return the agency to profitability.

The jobs losses — which follow 140,000 layoffs in the past five years — will come as the Postal Service closes or consolidates more than 200 mail processing centers, which alone will reduce operating costs by about $2.6 billion annually. However, a temporary moratorium will keep those closures from occurring until May. The USPS also plans on halting next-day delivery to save additional work costs.

The Postal Service also wants to close thousands of post offices, end Saturday delivery and take over health benefits, among other cost-cutting measures.

Already this year, the USPS raised the rate for first-class mail by a penny, and also made larger hikes to postcard rates and international mailing rates, putting cramps on companies like Netflix (NASDAQ:NFLX) and American Greetings (NYSE:AM).

All the various moves are meant to stem the Postal Services’ financial bleeding, which Postmaster General Patrick Donahoe estimated will be around $18 billion annually without the agency’s various initiatives. The USPS says most of its problems stem from the recession and the continuously increasing use of email.

— Kyle Woodley, InvestorPlace.com Assistant Editor

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