New York (CNNMoney.com) – The U.S. Postal Service is laboring under an outdated business model and needs to cut salaries, close facilities and take other steps to to aggressively slash costs, the Government Accountability Office said Monday.
"USPS's business model is not viable due to USPS's inability to reduce costs sufficiently in response to continuing mail volume and revenue declines," the GAO said in a report. "Given its financial problems and outlook, USPS cannot support its current level of service and operations."
The GAO study was commissioned after the Post Office submitted a proposal to Congress last month to overhaul its business model that included, among other things, the elimination of Saturday mail service.
Over the last three years, the USPS has lost nearly $12 billion as mail volume plunged 17% due to the weak economy and the increasing popularity of electronic mail.