Is it necessary to customize letters of recommendation with recipient names?

I can hardly see the need of addressing the reader in a letter of recommendation, but if your professor wants to do it, they can use a process called mail merge.

Common word processors have mail merge functionalities (e.g. MS Word).

A customized letter of recommendation shows that the writer cares about the success of the applicant. Each letter should have the name of the recipient, or if unknown, the recipient's institution, at the beginning. It should also address the specific requirements of the position.

Not all professors customize their letters to the specific recipient. It probably helps a little (especially if the recipient is at a prestigious institution, so that they know that this letter isn't directed at a generic less-prestigious institution), but it's not that necessary.

But you definitely should. If you are applying to 100 different professors for the position of postdoc, and you send them a form letter saying "I am very interested in your work" without once mentioning what their work is, they are very likely to realize that it is a form letter, decide that you're probably not all that interested in what they're doing, and disregard your application.

So it's probably not enough to just put in their name, but you should also mention something about their field of research that interests you and explains why you would be the correct postdoc for them.

Is this a lot of work? Yes, but consider that you're competing for postdoc positions with a lot of other people who may not mind going to the effort of putting in a lot of work in order to get a job. Do you think professors want to hire lazy postdocs?