The US Postal Service (USPS), the second largest employer in the US after Wal-Mart, proposes eliminating 20 per cent of its workforce by 2015, but can only do so after getting approval from the US Congress and postal unions.
The Postal Service, a quasi-government agency that relies on postage sales and revenue from other products and services to fund operations, is on track to lose a record $9 billion during the fiscal year ending 30 September.
To make up for its huge losses, USPS is planning to cut as many as 120,000 jobs, though it actually needs to get rid of 220,000 jobs from its 583,908-strong workforce in order to get out of the financial mess.
The latest cuts were first reported by The Washington Post, which said that the USPS has sent a notice to employees apprising them of its proposed plans. "Financial crisis calls for significant actions, we will be insolvent next month due to significant declines in mail volume and retiree health benefit prefunding costs imposed by Congress."
CNNMoney said that according to documents obtained by it, USPS has urged the Congress to remove collective bargaining restrictions in order to lay off 120,000 workers. It is also seeking approval to replace existing government health care and retirement plans and replace them with its own benefit plans.
The USPS claims that while it needs to eliminate 220,000 positions, or more than 30 per cent of its employees by 2015, only 100,000 can be made through attrition, while the remaining 120,000 will come from lay offs, according to the documents.