Postal Service to Restructure, Cut Top Jobs

In the most dramatic restructuring of the Postal Service in the last 25 years, Postmaster General Marvin T. Runyon is expected to announce today a 25% cut in managerial positions and a complete overhaul of the service’s much-criticized, military-style hierarchy.

The changes, which will go into effect over the next three months, aim to reduce next year’s projected Postal Service deficit of $2 billion and to delay by at least a year a stamp rate increase originally scheduled for 1994.

Runyon, who took the job of postmaster general last month, will announce the elimination of 30,000 of the service’s 130,000 management jobs, congressional and industry sources said Thursday.

The service will offer early retirement to eligible employees as an incentive to leave and offer other employees positions that become vacant. While postal officials plan to avoid layoffs, industry officials said they may be unavoidable.

The move won praise Thursday from some of the service’s harshest critics, from union leaders to industry representatives.

“At first blush this looks to be very good and very necessary,” said Art Sackler, managing director of the Mailers Council, a coalition of business mailers. “Pushing people down and out and reorganizing positions is something people have called for a very long time.”

Known as “Carvin’ Marvin” in his former job as chairman of the Tennessee Valley Authority, Runyon has said he wants to make the Postal Service more competitive and trim its bloated management. The plans will replace the Postal Service’s current 73 regional divisions with what one industry insider called a “two-pronged line structure.”

Runyon’s strategy is to reorganize the service on a corporate rather than its current military model, in which employees must follow rigid directives.

Mirroring a corporate model, the new organization will divide the post office into two divisions, a distribution and processing side and a customer services side, industry sources said.

The first division will oversee the moving of mail while the customer services side will handle retail and business mail and express mail delivery, where the post office faces the greatest competition from private mail delivery firms.

In addition, the service’s 42 top officers will be cut back to 24 and the word “general” removed from their titles. Only Runyon and the deputy postmaster general will retain their old titles. Other officers will be called vice presidents with one executive vice president--known as chief operating officer--under the deputy postmaster general, congressional and industry sources said.

One of the nation’s largest employers, the Postal Service has 748,961 employees, more than the U.S. Army.

Each day the Postal Service handles an estimated 540 million pieces of mail, which are shipped to about 92 million households and more than 7 million businesses.

Runyon is scheduled to announce the changes today on Postal Service Television Network, which is seen by workers throughout the service’s 40,000 post offices, via satellite at 1 p.m. and at a press briefing after the broadcast.

Runyon is expected to announce a second phase of reorganization of the service’s unionized blue-collar workers sometime soon, congressional and industry sources said.

Union officials said Thursday they do not know what Runyon’s plans for their workers will be, but welcomed the managerial cuts.

Tom Fahey, spokesman for the American Postal Workers Union, said the reductions go a long way toward decreasing the service’s current 6 to 1 employee-to-supervisor ratio. “There’s too much fat. There’s too much bureaucracy,” he said.

Said Sackler: “It’s a very good step to try to orient this business less as a hierarchy and a lot more as a business.”