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Government May Drop Saturday Mail Delivery and Close Nearly 3,700 Post Offices

...estimates show the potential to save as much as $200 million

Is your local post office one of the thousands that the U.S. government is planning to shutter? To be precise, the U.S. Postal Service is examining 3,653 locations for potential closure in an effort to save money and balance its books. Offices will be examined in all 50 states and in Washington, D.C.

The financially-troubled agency announced Tuesday that it will study local offices, branches and stations for possible closing. Many of these locations may be replaced by Village Post Offices, which essentially means that postal services will be offered in local stores, libraries or government offices.

In discussing the proposed changes, Postmaster General Patrick Donahoe said:

"The Postal Service of the future will be smaller, leaner and more competitive and it will continue to drive commerce, serve communities and deliver value.

Many of these general stores are hanging on for dear life out there. They can take the money we give them to pay the rent and pay the light bill. We think it's a real win-win proposal."

Below, watch a report from The Wall Street Journal:

You may be wondering why the Postal Service is making such substantial cuts. Unfortunately, the situation is grim. In fiscal year 2010, net losses were $8.5 billion, up from $3.8 billion the previous year. CNN Money has more:

Donahoe said that this and other moves, such as a proposal under consideration to reduce service to five days a week, are necessary to close a $20 billion gap in revenue by 2015.

Currently the post office operates 31,871 retail outlets across the country, down from 38,000 a decade ago, but in recent years business has declined sharply as first-class mail moved to the Internet. In addition, the recession resulted in a decline in advertising mail.

Most of the post offices that are under consideration for closure are not highly frequented. In fact, workers put in fewer than two hours of work per day generally and average sales do not exceed $50 in a given day. Closings are slated to begin in the next four to six months.

According to CNN Money, here's what's currently under consideration in a study that was released by the Postal Service:

-- Some 3,061 post offices with less than $27,500 in annual revenue, or 2 hours of workload daily

-- 385 post offices with less than $600,000 in annual revenue, and 5 or more postal service locations, such as stamp kiosks, within two miles.

-- 188 post offices with less than $1 million in annual revenue, and 5 or more postal service locations within 0.5 mile.

-- 19 offices currently suspended

While estimates show the potential to save as much as $200 million, there are some trade-offs. To begin, jobs are most certainly at risk. The closings could trim 3,000 postmasters, 500 supervisors and between 500 and 1,000 clerks. Currently, the Postal Service employs about 574,000 people.

The vast majority of sales in post offices are stamp purchases, officials said, and that can easily be handled at the new Village Post Offices. In addition, those offices would accept flat-rate packages and some could provide post office box service. For passports or other more complex services customers would have to go to a remaining regular post office. Already some 70,000 locations such as supermarkets and department stores sell stamps.

Considering the nation's current fiscal order, examining cost savings is essential. While it is unfortunate that some individuals may lose their jobs in the process, these cuts will provide at least a hint of relief and a potential blueprint for other agencies to follow in paring down unneeded expenditures.

The Associated Press contributed to this report.

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