WASHINGTON -- The U.S. Postal Service expects to lose $480 million and cut as many as 13,200 jobs in fiscal 2001, according to figures it released Tuesday.
Postal officials suggested that the losses could be even greater because the $480 million figure does not reflect the rate increases recommended on Monday by the independent Postal Rate Commission that were significantly lower than the increases USPS requested.
The Postal Service had asked for a 6 percent across-the-board increase in rates while the commission approved only a 4.6 percent rise, including a penny boost in the cost of a first-class stamp, to 34 cents. The rate commission reduced the rate increases sought by the Postal Service for periodicals and other forms of mail.
Einar Dyhrkopp, chairman of the USPS Board of Governors, said the Postal Service's financial condition is expected to worsen in coming years despite cost-cutting and improvements in productivity.
Postal Rate Commission Chairman Edward Gleiman, however, disputed the Postal Service's gloomy financial forecast, saying the lower rate increases will actually help the agency's bottom line by increasing volume.
"Our guess is that they would do slightly better with the smaller increases that we recommended," he said. "They ought to be able to break even during the current fiscal year. And unless they incur more than $500 million in unforeseen expenses, they could even be sitting on a little bit of a cushion."
The financial report predicting the loss of $480 million and the need to cut 13,200 "workyears" was released by USPS's chief financial officer, Richard Strasser, at a meeting of the Board of Governors Tuesday. The board will meet again next month, when it is expected to approve the increases proposed by the rate commission.
The 13,200 "workyear" cuts, which would be in addition to 6,200 such cuts made in fiscal 2000, could come from eliminating full-time and part-time jobs as well as reducing overtime.
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