Union Pacific Railway to Cut Its Workforce by 8% This Year -- WSJ
January 24 2020 - 3:02AM
Dow Jones News
By Paul Ziobro
This article is being republished as part of our daily
reproduction of WSJ.com articles that also appeared in the U.S.
print edition of The Wall Street Journal (January 24, 2020).
Union Pacific Corp. plans to run its railroad with nearly 3,000
fewer workers this year as the company pushes ahead with a new
operating plan that runs fewer, longer trains.
The Omaha, Neb.-based company said it plans to reduce its
average number of workers by around 8% in 2020 after reducing its
staffing by 11% in 2019. The railroad averaged around 37,500
workers during 2019 and nearly 42,000 during 2018.
Union Pacific is in the midst of a vast transformation of its
operations as it runs fewer trains with more cars. It is also
closing some yards that sort trains as it eliminates additional
handling of cargo.
The strategy, known as precision-scheduled railroading, is
sweeping across the U.S. freight railroading industry after being
honed by Canadian railroads
"The service design is reducing work that doesn't need to occur
and that's eliminating jobs," Union Pacific Chief Executive Lance
Fritz said in an interview Thursday. The company averaged 34,500
workers during the fourth quarter.
He said that as the railroad ships more goods, the company
should be able to add back some jobs. "As volume comes back, we'll
be able to grow our workforce," he said.
Rival CSX Corp., which operates in the eastern U.S. and is
further along in implementing precision-scheduled railroading,
ended 2019 with about 20,900 people, nearly 1,600 fewer jobs than
the previous year. It had 27,000 in December 2016 before the late
Hunter Harrison was named CEO and revamped the company.
As recently as two years ago, Union Pacific was offering
railroad workers signing bonuses of as much as $25,000 as it and
other freight railroads were struggling to fill jobs. But the
recent changes to the operating plan mean that Union Pacific can
operate its network with fewer people.
Union Pacific on Thursday said its quarterly profit fell almost
10% as revenue decreased from the comparable quarter a year
ago.
The company's fourth-quarter earnings were $1.4 billion, or
$2.02 a share, down from $2.12 a share a year earlier. Analysts
polled by FactSet expected $2.07 a share. Revenue was $5.21
billion, down 9.5%. Analysts had a consensus expectation of $5.22
billion.
The company said it expected an increase in shipping volume for
the full year after a slump in 2019. It is also targeting at least
$500 million in cost cuts.
Shares of Union Pacific rose 3.46% on Thursday.
Allison Prang contributed to this article.
Write to Paul Ziobro at Paul.Ziobro@wsj.com
(END) Dow Jones Newswires
January 24, 2020 02:47 ET (07:47 GMT)
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