Post Office To Move Forward With Cuts

The U.S. Postal Service is expected to announce Monday that it's moving forward with cuts that it says will save billions of dollars and help avoid bankruptcy.

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LINDA WERTHEIMER, HOST:

In this country, the Postal Service is set to announce that it's moving ahead with a series of cuts and changes starting in the spring. NPR'S Allison Keyes reports.

ALLISON KEYES, BYLINE: The agency has been warning for months that it is in serious financial straits. Back in September, Postmaster General Patrick Donahoe laid out a series of proposals. They ranged from slowing first class mail delivery, so most customers would no longer get mail the day after it was posted; closing or consolidating nearly 250 processing facilities; and adjusting the workforce size by as many as 35,000 positions, by attrition and other means.

PATRICK DONAHOE: Our immediate goal is to reduce total costs by 20 billion dollars by 2015. We have to meet this goal to return to profitability.

KEYES: The agency says mail volume has been declining for years, which has meant a loss of revenue. Savannah Haspel, spokeswoman for industry analyst IBISWorld.com, says one reason for the Postal Service's bad couple of years is competition.

SAVANNAH HASPEL: This is due in part to the Internet and changing technology, as well a poor economic conditions which has reduced business and consumer confidence.

KEYES: Haspel says the Postal Service's revenue-losing trend is expected to reverse slightly in the near future, with revenue rising .5 percent. But it's unclear how slower delivery and other changes would affect other services that depend on the post office, including newspapers, prescription drug deliveries in rural areas, and companies like Netflix, which delivers DVDs by mail. Allison Keyes, NPR News, Washington.

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