2nd UPDATE: US Postal Service Considers Closing Facilities to Save Money (BLOG)

--Postal service studies closing as many as 252 mail-processing facilities; cutting 35,000 jobs

--Postal Service plan would slow mail-delivery service

--Postal service says move would save $3 billion a year

(Adds background on closure plans; more detail.)


By Siobhan Hughes
Of DOW JONES NEWSWIRES
WASHINGTON (Dow Jones)--The U.S. Postal Service said Thursday it was considering closing more than half of its 487 mail-processing facilities, eliminating 35,000 positions and slowing mail delivery service in an effort to return to profitability.

"We simply need fewer facilities to process less mail," said Megan Brennan, the chief operating officer of the Postal Service, at a press conference.

As more people communicate online instead of through paper and pen, the country's postal service has been losing money and says it now has more capacity than needed to process mail. The mail service, which says it lost more than $9 billion last year, has already proposed ending Saturday delivery service--a change that Congress has so far resisted. The postal service now wants to close more facilities and slash its work force to make up for ongoing declines in mail volumes.

The newest plan calls for a study of closing as many as 252 facilities in a bid to save about $3 billion a year. In addition, the U.S. Postal Service would end one-day delivery service for first-class mail. The move would enable it to sort letters more frequently each day, instead of waiting until the night to process mail collected during the day. The result would be greater efficiency, as processing could start at noon and occur 16 hours a day, instead of from 12:30 a.m. to 7 a.m. each day.

The Postal Service, which is the country's largest employer after the military and Wal-Mart Stores Inc. (WMT), said it intends to eliminate 35,000 mail-processing jobs, out of a total 151,000 such positions. It said it would work with the union and hopes to avoid layoffs, relying instead of retirements. The postal service currently has 559,000 employees.

The mail service also said that the restructuring would mean fewer mail trucks and half as much mail-processing equipment.

The plan still faces a comment period but the Postal Service says it could be implemented without congressional approval. Even so, with a list of possible facility closures circulating, lawmakers could push back and challenge the closure of facilities within their own districts.