USPS Is Reducing Jobs to Control Losses
The United States Postal Service (USPS) is cutting jobs in Baltimore, Maryland. Employees have been sent an internal notification warning that management is planning to cut vacant jobs.
The 100-or-more job cuts in Baltimore are expected to take place in the new fiscal year, which starts on October 1.
In response, workers who are members of the American Postal Workers Union are protesting management’s decision to cut the jobs, saying the cuts will result in poor service for USPS customers. The protesters believe that the vacancy cuts will cause hiring to be halted, thus causing current workers to be forcibly transferred to new locations or new shifts to cover the vacancies.
The job cuts were announced within a month after the USPS released its quarterly earnings report. A loss of $562.0 million was reported by the postal service, in spite of the fact that the service saw an increase in deliveries of packages. (Source: Ibid.)
The increasing shift of Americans toward online shopping has proved to be a boon to the postal service. However, first-class mail deliveries have fallen as Americans opt for online bill payments and other digital services like online banking, causing a decline in letter mail deliveries.
In addition, retiree healthcare obligations have become a significant expense for management. Expenses owing to healthcare and pension benefits turned USPS’s latest quarter operating revenue of $17.3 billion into a loss. (Source: Ibid.)
Costs related to healthcare and pension benefits have historically been burdensome for the organization. Back in 2011, the postal service proposed moving its employees from the Federal Employees Health Benefits Program to a privately administered program in order to cut costs.
Earlier this year, the postal service arrived at an agreement with more than 200,000 workers to cut some of the healthcare costs. Under the agreement, the employees were awarded a raise in their salaries, but their healthcare benefits were slashed by three percent.
The postal service has been losing money for years, during which period management has laid off thousands of employees.
“Postal workers warn of potential job cuts, service impacts in Baltimore,” The Baltimore Sun, June 10, 2017.
“200K Postal Workers Would See Pay Raises, Benefit Cuts Under New Labor Contract,” Government Executive, May 15, 2017.