The cash-strapped Postal Service is suspending performance awards for managers and executives.
The post office, which made the announcement Friday, is facing financial losses that could reach $8 billion for the year because of the weak economy and movement of communications to the Internet.
Earlier, the agency suspended contributions to its employee pension fund.
Over the last four years the Postal Service has cut its staff by 110,000 and reduced costs by $12 billion.
The agency is seeking congressional action that would let it end Saturday delivery and annual advance payments of more than $5 billion for future retiree medical costs. It's the only agency that has to make such payments.
The post office, which does not receive tax money for its operations, is also seeking to close smaller offices.