Hoping to save his financially strapped semi-independent federal agency about $750 million a year, Postmaster General Patrick R. Donahoe has announced that the "newly redesigned" U.S. Postal Service will be eliminating 7,500 jobs and closing seven district offices.

"I am confident that we have developed a strong plan that takes a key step toward a leaner and less bureaucratic structure," said Donahoe in a press release.

"One that is fair to our employees and one that will meet the future needs of our customers and the mailing industry."

Also See:Saturday Mail: The Email Irony

The USPS expects the full cost-savings effect of the personnel cuts to be realized by March 2012.

How Fair to Employees?

Before just going out and rolling 7,500 heads, the Postal Service will try to entice some employees to leave on their own by offering a voluntary early retirement (VER) program featuring substantial financial incentive.

Under the VER, postal employees who are at least 50 years old and at least 20 years of service; or any age with at least 25 years of service will be qualified to take retirement and receive a $20,000 incentive paid over two years.

Exclusive of employees who opt for the early retirement incentive, most of the jobs to be eliminated will be from the administrative and executive ranks of the Postal Service. "Additional staff reductions will occur as the Postal Service makes necessary changes to its network and retail operations," stated the USPS.

Facility Closures

Along with the force reduction, the Postal Service announced it would close its district offices in Providence, Rhode Island; Columbus, Ohio; Troy, Michigan; Carol Stream, Illinois; Macon, Georgia; Billings, Montana and Albuquerque, New Mexico. The USPS stressed that the offices to be closed house administrative functions only. Customer service, mail delivery, Post Office operations or ZIP codes will not be affected.

It's Not Just the Money, Says USPS

While the Postal Services agrees that cutting 7,500 jobs and closing seven district offices will help reduce some of the costs that led to its $8.5 billion loss in 2010, Postmaster Donahoe says the cuts will actually help its customers. The cuts, he says will streamline and "flatten" the USPS, bestowing it with the flexibility needed to more quickly adapt to changes in the mailing industry and ongoing declines in mail volume.

"The Postal Service is streamlining operations and improving efficiencies across the organization in order to protect its ability to provide affordable, universal mail service. By modifying networks, consolidating functions and restructuring administrative and processing operations, the Postal Service is adapting to meet the evolving needs, demands and activities of its customers," says the USPS press release.

Also See:USPS Could Learn from Foreign Postal Services

"Mail remains valuable. It is at the heart of a $900 billion industry that continues to drive commerce and the American economy," Postmaster Donahoe added. "We will continue to work with Congress and our employees to achieve the long-term, structural and legislative changes we know we need to remain a viable organization."