Famous Railroad Company Laying Off 750 Employees, Mostly in Nebraska
One of America’s largest railroad companies, Union Pacific Corporation (NYSE:UNP), has announced that the company will be laying off 750 workers by mid-September this year. The company is undertaking the cost-cutting initiative to protect its bottom line numbers.
The Omaha-based railroad giant has confirmed that it will be slashing 500 management and administrative jobs, which will cut its management workforce by about eight. Meanwhile, an additional 250 railroad workers, employed on hourly wages, will also face layoffs.
The job cuts, which will mostly be taking place in Nebraska, will help Union Pacific achieve company-wide efficiencies.
Prior to cutting these jobs, Union Pacific had been trimming its workforce through attritions. The company’s headcount kept decreasing as more and more employees reached their retirements.
At the same time, the railroad company has also been employing new and improved technology to automate some operations, thus reducing the need for new hires for a number of job functions.
Yet, management felt the need to further reduce the employee count to make additional cuts to their general and administrative costs. The job cuts are expected to save the company roughly $110.0 million in annual costs.
According to the CEO of Union Pacific, Lance Fritz, these layoffs had become necessary. The CEO said in a statement, “Union Pacific for some time has leveraged employee attrition and technology to reduce general and administrative costs.” He further added, “Unfortunately, attrition alone will not keep pace with our need and ability to reduce these costs.”
Job cuts, however, do not come as cheap. Union Pacific expects to incur about $90.0 million in costs on its reorganization plan.
It’s worth noting that despite being highly profitable, the company has been facing declining revenue and earnings in past years. Yet, management has been consistently increasing its dividend payout to shareholders.
The Union Pacific layoffs come at a time when the railroad industry is transitioning. Railroad companies, like other giant American corporations, are increasingly employing technology to reduce redundancies in their operations.
Just last month, railroad company, CSX Transportation, also announced a similar number of job cuts. By the end of the year, over 3,000 CSX railroad employees will be out of work. Like Union Pacific, the Florida-based CSX is also trying to achieve operational efficiency.
Union Pacific currently employs about 8,000 employees in Nebraska, where it is headquartered. Its total workforce spread across 23 U.S. states is roughly 42,000 employees.
“Union Pacific follows corporate trend, trimming 750 positions, mostly at Omaha headquarters,” Omaha World-Herald, August 17, 2017.