The Postal Service has announced it ended the first quarter of the fiscal year with a $279 million net loss – slightly better than 2009’s $384 million loss, but continuing a trend of ongoing losses likely to continue despite managerial and legislative efforts to stanch the bleeding.
"Unfortunately, economic drivers that significantly affect mail volumes, such as continuing high unemployment levels and lower investments, appear to be lagging general economic recovery and last quarter’s growth in GDP," said Joseph Corbett, chief financial officer and executive vice president.
The first quarter loss was expected despite aggressive cost reduction efforts, USPS said. It said that fiscal 2009 cost savings totaled $6 billion and efforts continue into 2010.
For example, the Postal Service said it cut work hours for the first quarter by more than 28 million, or the equivalent of 15,800 full-time employees — on top of a reduction of 115 million work hours, or the equivalent of 65,000 full-time employees last fiscal year.
Regardless, USPS expects losses to continue going forward, but expressed some uncertainty regarding whether Congress would again enact legislation this year to restructure USPS’s obligation to pre-fund retiree health benefits to the tune of $5.6 billion a year.
