Office of Personnel Management Director John Berry said Wednesday that Postmaster General Patrick Donahoe alerted him a week earlier that USPS could offer both early retirement and buyout incentives to encourage employees to leave.
Chief Financial Officer Joe Corbett on Thursday outlined for reporters the Postal Service's ambitious plans to pare down its workforce in the next five years by 155,000 employees — ultimately reaching an end strength of 402,000 by the end of fiscal 2016.
Normal attrition removes roughly 30,000 employees a year, so it appears likely the agency will have to resort to either early retirement offers or buyouts or both to reach its downsizing targets. The agency's labor contracts generally prohibit layoffs.
Corbett told reporters in a conference call that early retirement incentives are under consideration, but he did not discuss the possibility of buyouts.
"We'll announce our path forward soon," Corbett said. Asked later whether buyouts are on the table, a USPS spokeswoman said she had no "additional information."
By the Postal Service's count, 283,000 workers are currently eligible for regular or, if offered, early retirement.
The Postal Service released its five-year plan after posting a net loss of $3.3 billion for the first quarter of fiscal 2012, usually the most profitable quarter because of the holiday shipping season.
The proposed workforce reductions would be part of a comprehensive strategy to save more than $22 billion annually by 2016. Other pieces of that strategy include ending most Saturday delivery; allowing the Postal Service to create its own health coverage in place of the Federal Employees Health Benefits Plan; and dropping the legal requirement for the Postal Service to pay about $5.5 billion annually into a fund to cover future retiree health benefits. Otherwise, Corbett warned, the Postal Service will need taxpayer help to survive.
In addition to the 117,000 employees the agency aims to shed between last October and September 2013, the agency aims to trim 38,000 in 2014 through 2016 for a total of 155,000 for the five-year period.
Corbett also defended the mail carrier's bid to create its own three-tier health plan for current workers, new hires and retirees. The agency plans to unveil details of the plan soon, Corbett said.