When Will the Postal Service Reduce Staff?

The Postal Service has published a detailed schedule of dates that are important for employees whose jobs will be affected by the management restructuring.  Anyone who could be affected should print out, or bookmark this schedule and add the key dates to their smartphone calendar so they are sure act by the required deadlines if they plan to take advantage of early retirement or will need to find a new job within the Postal Service.

For those outside of the Postal Service, only those dates on which current Postal employees will leave employment matter.  These are the dates that the Postal Service begins experiencing cost savings from either early retirements or RIF's.  These dates are:

• May 31, 2011 - effective retirement date for individuals taking VERA or retirement incentives
• September 9, 2011 - last separation date for RIF although some will separate earlier

How much the Postal Service saves this year depends on how many of the 7,500 reductions in management employees take early retirement and how many are laid off in a RIF.  

The Postal Service will save 1/4 of a year's compensation from everyone who retires this fiscal year while the incentive will not show up on the income statement until fiscal years 2012 and 2013.  Savings for those who are RIF'ed is limited to one month of FY 2011 salary.  Some individuals who are RIF'ed may face separation before that date but it is not clear at this point how many.

RIF's have other costs associated with unemployment insurance and possibly severance payments.   I have read the civil service RIF rules but find them confusing so I am not sure how provision for separation payments would apply to Postal Service employees.  With a September 9th separation date, it is likely that most of the costs of a RIF would occur in FY 2012.