The United States Postal Service announced Thursday that it would begin consolidating 48 mail processing centers beginning in July, the first phase of a cost-cutting plan that is intended to save the agency nearly $1.2 billion a year as it tries to adjust to declining mail volume.
The agency said it would consolidate an additional 92 processing centers in February, and 89 more in early 2014.
In all, the Postal Service said it would close 229 processing centers — about half of the total — and it expects to save about $2.1 billion a year after the plan is fully carried out in 2014. About 5,000 workers will be immediately affected by the consolidations, the agency said, though it was unclear if they would be reassigned or given incentives to retire. About 13,000 employees will be affected once the first phase is completed by February. A total of 28,000 positions will be eliminated by 2014.
The service’s latest plan to reduce costs comes as the agency continues to endure financial losses. In the first two quarters of the 2012 fiscal year, which ended March 31, the agency lost more than $6 billion.
A decline in first-class mail and the development of automated equipment have left the mail processing network larger than needed, and revenue has not kept up with the cost of maintaining the system, the agency said.