The U.S. Postal Service (USPS) said yesterday it expects to lose $1.5 billion in its fiscal year, which is far less than the agency's previous estimate of as much as $4.5 billion. USPS had projected that plunging mail volume, a slowing economy and last year's anthrax scare could cause losses to balloon from last year's $1.7-billion deficit.
Postmaster General John Potter said USPS would save about $1 billion by cutting 20,000 jobs, trimming 60-million work hours and closing some small post offices and processing centers to strengthen its financial status. He added that the rise in cost of mailing a domestic first-class letter to 37 cents on June 30 will boost revenue by as much as $500 million a month, which will help cover rising costs.
Potter said mail volume will be about 201.5-billion pieces in fiscal year 2002 ending Sept. 30, a drop of nearly 6-billion pieces from a year ago.
USPS last month issued a transformation plan asking Congress to give it full control over stamp prices and allow it to close facilities as needed. Under the current system, the independent Postal Rate Commission must approve all stamp increases, a tedious process that can take upwards of a year to complete.
The post office said it expects to cut $5 billion in expenses during the next four years, and it has promised mailers it will not raise postage again until at least 2004.