The reorganization is the first significant move to address the service's financial woes by new Postmaster General Patrick Donahoe. Donahoe took over from John Potter, who retired in early December.
The number of VP-level officers will be reduced from 44 to 37, according to USPS. Also to be eliminated is the Memphis, Tenn.-based Southeast regional office, which has 119 employees.
The Postal Service lost $8.5 billion in its 2010 fiscal year, which ended Sept. 30. Donahoe has said the announced reorganization is part of his attempt to cut $750 million in Postal Service expenses.