The U.S. Postal Service (USPS) yesterday released its 2009 year-end financial results, showing a net loss of US$3.8 billion for the year. In 2008, the USPS had a net loss of US$2.8 billion.
The 2009 loss comes despite drastic cost-cutting efforts, which the USPS claims to have resulted in US$6 billion in cost savings and a US$4 billion reduction in required payments for retiree health benefits. These reductions are largely the result of 40,000 “career USPS employees” being laid off.
“Our 2009 fiscal year proved to be one of the most challenging in the history of the Postal Service,” said CFO Joseph Corbett. “The deep economic recession, and to a lesser extent the ongoing migration of mail to electronic alternatives, significantly affected all mail products.
“We undertook comprehensive cost-cutting measures across all areas of the organization,” Corbett said. “Most notably, we reduced work hours by 115 million, or the equivalent of 65,000 full-time employees – a larger number than the entire workforce at more than 80 percent of Fortune 500 companies today.”
Operating revenue for the USPS in 2009 amounted to US$68.1 billion, compared to US$74.9 billion in 2008. Total mail volume in 2009 reached 177.1 billion pieces, compared to 202.7 billion pieces in 2008, a decline of 12.7 percent.
In its report on the financial statements, independent auditor Ernst & Young emphasized that “questions remain about the ability of the Postal Service to generate sufficient liquidity to make all of its payments, including the US$5.5 billion retiree health benefits payment due on the last day of 2010.”
The USPS’ 2010 plan estimates a revenue decline of US$2.2 billion, a net loss of US$7.8 billion, cost reductions of more than US$3.5 billion and a reduction in mail volume of 11 billion pieces for the year.