Postal Service to Cut Jobs, Services

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Employees of the U.S. Post Office have good reason to fear for their jobs this Labor Day. Postmaster General Patrick Donahoe is gunning to lay off as many as 120,000 by the end of the year.

In an interview with The New York Times, Donahoe said his situation was "extremely serious."

"If Congress doesn't act, we will default," he said.

Donahoe needs Congressional approval to nullify an existing contract prohibition on layoffs. Donahoe said if he doesn't exact a host of changes, including elimination of Saturday delivery and massive layoffs, a $9 billion dollar deficit will force the postal service into default.

According to the Times, Donahoe's agency will be unable to make a $5.5 billion retiree health-care payment later this month and is expected to run out of money to pay its existing workforce.