Another 120,000 To Be Added To The Walking Dead

No, I am not talking about the awesome AMC Networks AMCX show "Walking Dead," but rather the soon to be added to the unemployment line. The United States Postal Service is considering cutting 120,000 jobs, in addition to the 100,000 it expects to lose through attrition, as it seeks to get its fiscal house in order. If it can not cut the jobs needed to stay afloat, there could be a drastic change to the benefits that the postal workers receive. According to documents obtained by CNNMoney, the USPS has appealed to Congress to allow it to cut 120,000 jobs, as well as repeal the current benefits its employees receive. If it can not do this, the Post Service could need a bailout. This is a sad state of affairs for the USPS, but it is a sign of the times. More people are using digital forms of paying bills, and mail volume continues to decline, much faster than the USPS anticipated. "To restore the Postal Service to financial viability, it is imperative that we have the ability to reduce our workforce rapidly," the USPS wrote in documents to Congress. A document on cutting the workforce said, "The Postal Service is facing dire economic challenges that threaten its very existence and, therefore, threaten the livelihoods of our employees and the businesses and employees in the broader postal industry and overall economy." Mail volumes have fallen 20% over the past four years, and the USPS has lost over $20 billion in those four years. The USPS does not get funded by the tax payer, but rather through stamp collection, as well as package services, and other products it sells. Just last year, the Postal Service lost $8.5 billion. The year before, it lost $3.8 billion, so the losses are clearly mounting and snowballing from here. Just last quarter, the USPS lost $2.2 billion. Projecting that over a full year, the USPS would lose almost $10 billion. The trends are there for continued losses to escalate. If conditions continue to get worse, we could see the end of the USPS in our lifetime, with perhaps FedEx FDX and UPS UPS taking over their responsibilities. Last month, the Postmaster General Patrick Donahoe talked about cutting 3,7000 post offices that are either low revenue or could be folded into others. The time for the giant post office has come and gone. If this was a private sector company, it would have filed Chapter 11 and restructured. Many have long advocated for the Postal Service to be spun off into a public company, as Fannie Mae and Freddie Mac were. This would make the pain it is currently experiencing easier for it to maneuver around. These 120,000 unfortunate souls will soon join the ranks of the unemployed, only adding to the woes of the country. More of the walking dead. ACTION ITEMS:

Bullish:
For FedEx and UPS over the long term. It is only a matter of time before the USPS folds or shrinks so much that it benefits FedEx and UPS. Bearish:
For employment in this country. As times change, and technology continues to improve efficiency, jobs are lost. It is a sad state of affairs, but it is a fact of life. The country already has 9% unemployment, and adding another 120,000 to the ranks is not going to help.

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