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Postal Jobs To Be Cut

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The U.S. Postal Service has dropped the other shoe, reports CBS News Correspondent Lou Miliano. After announcing that higher postal rates are likely, it warns thousands of jobs will be eliminated.

Chief Financial Officer Richard Strasser said Tuesday the agency has cut more than 16,000 full-time career employees over the last 15 months and continues to make reductions.

Strasser said officials anticipate a further reduction of 10,000 to 15,000 this fiscal year. The agency has nearly 800,000 workers.

The reductions "will be made through attrition, we are not talking about layoffs," Strasser stressed Wednesday.

He said the agency is making the reductions in anticipation that mail volume will grow little in coming months because of the soft economy. The reductions can be made because of improved technology, restructuring and better productivity, he said.

Sally Davidow of the American Postal Workers Union noted that her members have contract protection against layoffs, but said the union is concerned about the overall health of the postal service.

The agency is some $550 million in the red this fiscal year and faces potentially billions of dollars in costs from the effort to protect the mail from anthrax contamination and in losses due to the sluggish economy.

Negotiations are under way to move up a planned postal rate increase to June 30, three months ahead of schedule.

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