Thursday, August 17, 2017

UP cutting 750 jobs

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Union Pacific chief executive Lance Fritz Union Pacific chief executive Lance Fritz

Union Pacific on Aug. 16 said that by mid-September, 750 jobs from its 42,000-person work force will be eliminated—500 from management, 250 from the rank and file—saving the railroad approximately $110 million annually in G&A (general & administrative) costs.

The 500 non-agreement positions to be slashed represent 8% of UP management. Most of those cuts will affect the railroad’s Omaha, Neb., headquarters.

Chairman, President and CEO Lance Fritz said that UP has taken employee attrition and technology about as far as it can go in reducing costs. Those methods are not keeping up with UP’s need to further reduce expenses, he said.

Rail freight traffic has been picking up in 2017 following a nearly two-year slowdown marked by a precipitous decline in coal, and crude oil business that fell as fast as or even faster than the boom that created it. Apparently, the rebound hasn’t resulted in what many industry observers believe is sustainable growth in traffic and revenues.

“The hiring spurt seen by most of the large railroads after 2010 is obviously over,” noted one industry observer. “And it seems as though railroad corporate leaders have a great deal more trust in hard dollar cuts than they typically do in believing in revenues from growth in traffic units.”

 

 

 

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