USPS expected to lose $8.5B, cuts likely

The U.S. Postal Service is expected to lose $8.5 billion this year, which is why it's come up with a drastic proposal that would shut down more than half of its processing facilities.

The postal service processes 175 billion pieces of mail a year. That's a large amount, but not nearly as much as what they're used to handling. In five years, mail volume has dropped 43 billion pieces.

"So while we're seeing less and less mail, that means we are also seeing idle equipment standing by with no mail to run through it which means we have employees with less work to do," said USPS spokesman Gus Ruiz.

The 2008 recession and the Internet are to blame. The postal service now wants to shut down up to 250 processing facilities across the country in hopes of saving $3 billion a year. In Northern California, facilities in Eureka, Redding, Petaluma, Burlingame, Stockton and Modesto are being considered.

Such closures wouldn't affect service at the post office, but they would slow down mail delivery. First-class mail would take two to three days instead of one to three. Customers we talked to seem to be understanding.

"The post office needs to balance its budget, so I can see them cutting costs. Everyone else is cutting costs, so it should be one or two days is not going to be a big deal," said customer Jetson Lee

"I don't use the post office that, that much. I mean I ship things here and there, but for regular first-class mail, it really wouldn't affect me too much. I actually do most things online," said customer Mark Moreno.

But the American Postal Workers Union is against the proposal. The postal service wants to eliminate 35,000 workers and that doesn't sit well with some customers.

"This is a good job. If somebody loses this job, they might lose their housing and [there is] so many [things] going on behind this," said customer Gaurang Patel.

Any change to mail delivery needs congressional approval. The postal service hopes lawmakers will go along.

"We're not going away, we're not closing down, we're not going out of business. We're doing this so we can stay in business," said Ruiz.

The postal service has 574,000 career employees. It is the nation's second largest civilian employer after Walmart.

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