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March 24, 2011

SPECIAL EDITION

PMG PATRICK DONAHOE REACTS TO PRC DECISION ON FIVE-DAY MAIL DELIVERY

Postmaster General Patrick Donahoe issued the following statement today.

“We have received the Commission’s advisory opinion on our proposal to move to a five-day delivery schedule. We have been awaiting the document and look forward to studying the views expressed by the Commissioners. Five-day delivery is an integral part of our action plan for the future.

“It’s important to remember that the Postal Service came well-prepared to this undertaking. Based on extensive outreach to our customers and other stakeholders, we developed an operational plan, analyzed the potential cost savings, and conducted extensive market research to document customer reaction and estimate mail volume changes that could result from implementation of this plan.

“Following tremendous losses in mail volumes and revenues, the Postal Service remains in the midst of a period of great financial instability. On March 30, 2010, we presented a compelling case to the PRC, reflected in the testimony of Postal experts in operations, marketing and finance, as well as a highly respected market research firm and academician. Their testimony demonstrated that the plan would effect a $3.1 billion annual saving and allow the Postal Service to continue providing excellent service in an economical and efficient manner.

“The Commission’s opinion is advisory only, and therefore, is not a final determination on the merits of our proposal. We remain convinced of our findings. As such, we will also continue to press our case with the Congress on this matter.”

PMG CONTINUES EFFICIENCY IMPROVEMENTS

LAYERS ELIMINATED, EXECUTIVE RANKS REDUCED

Postmaster General Patrick Donahoe today announced a newly redesigned Postal Service, one that is better positioned for growth, reflects further alignment within the organization to achieve core business strategies and, when fully implemented, will help realize approximately $750 million of annual cost savings.

“I am confident that we have developed a strong plan that takes a key step toward a leaner and less bureaucratic structure. One that is fair to our employees and one that will meet the future needs of our customers and the mailing industry,” Donahoe said.

About 7,500 positions will be eliminated across the organization through the redesign that also includes the closing of seven district offices, and offers voluntary early retirement and limited financial incentives to those who meet specific qualifications.

The seven district offices that are closing are Columbus, Ohio; Southeast Michigan/ Troy, MI; Northern Illinois/ Carol Stream, IL; Southeast New England/ Providence, RI; Southern Georgia/ Macon, GA; Big Sky/ Montana (Billings); and Albuquerque, NM. District offices house only administrative functions and do not affect customer service, mail delivery, Post Office operations or ZIP codes. The functions of these seven districts will be assumed by district offices within close proximity.

“It’s critical that we adjust our workforce to match America’s changing communications trends as mail volumes continue to decline,” Donahoe said. “At every step and with every change, our focus remains on our customers and continuing to provide outstanding customer service.”

Today’s announcement focused on the administrative and executive corps. Additional staff reductions will occur as the Postal Service makes necessary changes to its network and retail operations. The full scope and financial impact of these personnel actions should be realized in one calendar year, by March 2012.

While cost savings will be realized, the main objective of the restructuring is to enhance and strengthen customer service and relationships. The realignment flattens the organization, enabling flexibility to more quickly adapt to changing market forces and continuing mail volume decline.

The Postal Service is streamlining operations and improving efficiencies across the organization in order to protect its ability to provide affordable, universal mail service. By modifying networks, consolidating functions and restructuring administrative and processing operations, the Postal Service is adapting to meet the evolving needs, demands and activities of its customers.

“Mail remains valuable. It is at the heart of a $900 billion industry that continues to drive commerce and the American economy,” Donahoe said. “We will continue to work with Congress and our employees to achieve the long-term, structural and legislative changes we know we need to remain a viable organization.”

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