The agency has been facing considerable losses over the past years, and is currently working with DOGE to improve efficiency.
The United States Postal Service (USPS) said Thursday it has saved billions of dollars annually by cutting 50 million work hours, closing unnecessary facilities, and increasing plant productivity.
The changes translate to $2.5 billion in annual savings, the agency said in a March 20 statement.
Reductions are part of USPS’ Delivering for America 10-year plan which seeks to implement several changes to boost the agency’s financial and operational efficiency.
On March 13, Postmaster General Louis DeJoy said that USPS had terminated 30,000 workers since fiscal year 2021. Another 10,000 workers are expected to be laid off within a month, he added.
In addition to work-hour savings, Delivering for America has resulted in “$2.2 billion in annual transportation cost reductions by streamlining networks and optimizing air and surface options.”
USPS reported an increase in revenue by $3.5 billion annually by “adapting product offerings” as First-Class Mail volume has dropped
USPS also announced implementing “refinements to service standards” which it claims will save the agency a minimum of $36 billion over the next decade through reductions in real estate, transportation, and mail and packaging costs.
Even though service enhancements are not expected to cause delays in the current First-Class Mail delivery time, changes in regional transportation schedules may extend service expectations by one day for mail collected at certain post offices locations. Overall, delivery speeds for both mail and packages are expected to improve, USPS said.
The agency plans on implementing service enhancements in two phases, with the first set to begin on April 1 and the second on July 1.
Last month, DeJoy said that the USPS has long been burdened by rules that failed to account for changes in mail volume and mix. This has resulted in “costly and ineffective” operations.
“For decades—and most specifically during the last three years—Congress has actively resisted operational solutions and meaningful change.”
USPS’ new cost reduction plan comes after the agency reported a net loss of $9.5 billion for fiscal year 2024, which was $3 billion more compared to 2023. The higher losses happened despite revenues rising slightly from $78.18 billion to $79.53 billion.
