Postmaster General Patrick Donahoe announced his retirement Friday amid annual Postal Services losses surpassing $5 billion and ongoing battles with Congress over cost-cutting moves, including ending Saturday delivery.
He will be succeeded Feb. 1 by agency veteran Megan Brennan, who will become the first female postmaster general.
"We have grown our revenue for two years in a row, primarily through growth in our package business and price changes," Donahue said Friday. "While we still have major issues to resolve with regard to our business model and legislative constraints, our message today is about momentum and progress."
The board meeting came as hundreds of disgruntled Postal Service workers demonstrated outside the agency's headquarters over post office closures. Several dozen attended the public meeting inside but did not disrupt the session.
Donahoe, who has spent 39 years with the Postal Service, took over the agency during a serious financial crisis and oversaw a restructuring of the agency as it sought to deal with sharp declines in the volume of first-class mail.
"Pat was the calm in the financial storm. He ignored the naysayers and went forward with his team and built a comprehensive plan for the future of the organization, made tough decisions and executed against those decisions," said Mickey D. Barnett, chairman of the Board of Postal Governors. "That's a testament to the great team he built and his own personal leadership."
Donahoe's retirement announcement came as the agency reported a $569 million revenue increase in a fiscal year the year that ended Sept. 30, but an overall loss for the year of $5.5 billion.
Donahoe said there's still more to be done.
"The organization has a lot of momentum right now, and we're doing a lot to innovate and improve the way we serve the public and our customers," he said.
Brennan, the Postal Service's chief operating officer and executive vice president, told the board that being promoted to postmaster general is the "honor of a lifetime, especially for one who comes from a postal family." She will be the first woman to hold the job, according to the Postal Service.
As the COO, she oversees day-to-day operations for the agency, including mail processing, transportation, delivery and retail operations.
"Megan has led important initiatives to provide Sunday delivery services, improved tracking and greater predictability and reliability," Barnett said. "She has also been highly successful in rationalizing our mail processing, delivery and retail operations."
The agency has an about 491,000 employees.
The change in top management comes as the Postal Service seeks to cut costs to stay financially viable. Postal Service officials have pushed Congress to pass comprehensive legislation that would allow it to end most Saturday mail deliveries and reduce a congressionally mandated $5.6 billion annual payment for future retiree health benefits.
The Postal Service is an independent agency that receives no tax dollars, but it still is subject to congressional control.
Donahoe began working for the Postal Service as a clerk in Pittsburgh, where he was attending college.
"Working for a brand that touches every citizen of this great country every day has been a tremendous honor," he said. "It's always difficult to walk away from something you love and have a lot of passion for, but knowing that the organization is moving forward with a strong plan and lot of momentum makes it easier."