USPS Seeks 'Soft Landing' For Downsized Employees, Donahoe Says

The U.S. Postal Service plans to provide a "soft landing" for employees affected by downsizing and is looking for ways to avoid closing rural post offices, the Postmaster General will testify Tuesday.

"The Plan to Profitability focuses on workforce reductions through employee attrition versus layoffs or wage reductions, meaning impacted career employees would be able to retire or find another job in the Postal Service," PMG Pat Donahoe will tell a House subcommittee. USPS released his prepared remarks today.

"In response to declining mail volumes and to increase productivity, the Postal Service consolidated over 200 mail processing facilities in the past five years from our peak number of 673 facilities in 2006. In doing so, we have customarily provided a 'soft landing' for employees through retirements and reassigning staff, in an effort to minimize impacts on employees. We have been, and continue to be, a responsible employer."

Donahoe will largely reiterate his plea that Congress enable the Postal Service to adjust to declining mail volumes with such cost cuts as eliminating Saturday delivery, closing facilities, and letting it leave the federal government's inefficient employee-healthcare plan. But he will also provide hints that USPS's plan to balance its budgets is still a work in progress.

"Post Office optimization efforts are continually evolving and the Postal Service is continuing to work toward solutions that will enable communities to retain retail access, under various scenarios. We continue to evaluate and consider multiple alternatives."

"The Postal Service is developing a number of alternatives to closing Post Offices that could sustain offices in rural communities at a reduced cost to the Postal Service. This is still in the discussion  stage."

One approach that does not look promising, however, is developing new lines of business that are based in the post offices, Donahoe will say.

"It is true that many international posts derive a larger percentage of revenue from non-mail products and services, such as banking and insurance. Research has confirmed that our retail units do not have the wage levels or foot traffic to profitably expand into such services. However, we are looking at new and emerging communications technology, like digital mail."

Donahoe thinks the Postal Service can save money and provide lower premiums for employees by exiting the Federal Employee Health Benefits (FEHB) program and creating its own plan for employees and retirees.

"Unlike employers in the private sector, the Postal Service does not have the authority to actively manage its health care costs. We cannot introduce targeted wellness incentives and disease management programs for employees. We cannot leverage the significant purchasing power of our more than one million employees and retirees directly to negotiate a better deal in the competitive health insurance market. We cannot ensure that Medicare-eligible retirees fully participate in the Medicare benefits both employees and the Postal Service paid into. And we are not able to take advantage of the savings available to employers providing retiree health care benefits through coordination with the prescription drug benefits provided under Part D of Medicare."

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• Why Mailers Support Radical Downsizing of the Postal Service 
• Why USPS Must Consolidate Its Mail-Processing Network