Union Pacific announced Sept. 4 that it plans to lay off an unspecified number of non-agreement and agreement employees, according to a report in the Omaha World-Herald. UP attributed “continuous efforts to streamline operations, while aligning our service product and resources to drive efficiency” as the reason. “These are difficult decisions; however, we remain committed to providing our customers safe, efficient and reliable service that ensures Union Pacific remains a strong and competitive company,” UP said.
The layoffs continue workforce reduction efforts under way over the past two years. UP laid off 11,711 employees between September 2018 and July 2020, and earlier this year hit its employees with a RULA (Required Unpaid Leave of Absence) of one week per month. As well, top management has taken pay cuts of 25%. For example, CEO Lance Fritz’s base salary dropped from $1.17 million (according to a UP proxy statement) in 2019 to $878,000 this year. (His total compensation was just over $11 million in 2019, with bonuses and stock options.)
In September 2018, UP announced a new operating plan, Unified Plan 2020, based on PSR (Precision Scheduled Railroading). At that time, the railroad employed 44,531, according to a filing with the Surface Transportation Board. By July 2019, UP had cut about 4,000 jobs, reducing its numbers to 40,491. In July, roughly another 7,700 jobs were eliminated, bringing the number down to 32,820.
UP’s 2Q2020 was “very challenging,” in the words of Lance Fritz, as volume declined 20% compared to 2Q2019, mainly because of the COVID-19 pandemic. Operating revenue dropped $500 million, from $1.6 billion in 1Q2020 to $1.1 billion in 2Q2020.