Is the U.S. Postal Service finally getting its financial house in order, or are these cuts just a prelude to privatization? Or, perhaps, it’s both? USPS has now cut 50 million work hours and closed facilities all over the country – but has anybody even noticed a difference?
At a glance:
• USPS has cut 50 million work hours, closed facilities, and terminated 30,000 workers since 2021, with 10,000 more layoffs expected
• Postmaster General Louis DeJoy has agreed to pause mail processing facility changes until January 2025 after pressure from a bipartisan group of senators
• Despite cost-cutting measures, USPS reported a $9.5 billion net loss for fiscal year 2024
• The Postal Service has signed an agreement with Elon Musk’s Department of Government Efficiency (DOGE) to identify further cost-saving opportunities
• Service quality has declined, with first-class mail on-time delivery dropping from 91% to 84% in the past year
USPS Slashes Jobs and Facilities While Seeking Financial Stability
The United States Postal Service is aggressively cutting costs under Postmaster General Louis DeJoy’s “Delivering for America” plan – and not everyone is happy about it. The agency has eliminated 50 million work hours and closed numerous facilities since 2021 in pursuit of financial sustainability.
USPS already terminated approximately 30,000 workers since fiscal year 2021 and plans to lay off an additional 10,000 employees through voluntary buyouts. These dramatic workforce reductions are part of DeJoy’s 10-year strategy to address the Postal Service’s long-standing financial challenges.
The cost-cutting measures have already saved the Postal Service $2.5 billion annually, with projected savings of $36 billion over the next decade. Despite these efforts, USPS reported a significant net loss of $9.5 billion for fiscal year 2024, highlighting the considerable financial hurdles the agency continues to face. So it clearly needs DOGE’s help.
DeJoy Pauses Facility Changes After Bipartisan Pressure
In a rare display of bipartisan unity, 26 senators recently pressured Postmaster General DeJoy to halt plans for mail processing facility changes. DeJoy has agreed to pause these changes until January 2025, potentially delaying planned capital investments of $430 million and expected annual savings of $133-177 million.
“Even then, we will not advance these efforts without advising you of our plans to do so, and then only at a moderated pace of implementation,” DeJoy stated in his response to congressional concerns. His concession comes after mounting criticism of service degradation in areas where new mail processing hubs have already been established.
Service quality metrics have declined noticeably under the reform initiatives. USPS delivered only 84% of first-class mail on time in the second quarter of fiscal 2024, down from nearly 91% the previous year, raising questions about whether cost-cutting has gone too far.
Trump’s DOGE Department Eyes Postal Service Efficiency
The Postal Service has recently entered into a partnership with President Trump’s Department of Government Efficiency (DOGE), led by Elon Musk, and the General Services Administration (GSA). This collaboration aims to identify additional efficiencies within the postal system, focusing on retirement asset management and regulatory burdens.
The DOGE partnership has sparked controversy, particularly after Musk suggested privatizing the Postal Service entirely. The National Association of Letter Carriers has expressed strong opposition to privatization, while also seeking assurances that the agreement would not grant access to postal workers’ personal information.
Critics argue that service quality has suffered precisely because of DeJoy’s aggressive cost-cutting measures and postage rate increases. A group of senators noted that mail prices have increased at nearly double the rate of inflation, contributing to decreased mail volume and paradoxically worsening the agency’s financial position.
But if privatization can fix this mess, wouldn’t that be a good thing?
