UPDATE: NOVEMBER, 26, 2018 - ADDITIONAL LAYOFFS ANNOUNCED
In addition to the previously announced layoffs, UP will be laying off an additional 60 employees, mostly in the Little Rock, Arkansas area.
According to a company spokesperson, “"The workforce reduction is an effort to reduce our general and administrative support structure as we continue implementing our new operating plan, Unified Plan 2020, which ensures Union Pacific remains a strong, competitive and vibrant company.
UPDATE: OCTOBER 25, 2018 UNION PACIFIC ANNOUNCES ADDITIONAL LAYOFFS - 675 POSITIONS TO BE ELIMINATED
Union Pacific has announced prior to the release of its 3rd Quarter results that it will be laying off approximately 475 employees and 200 contracted positions as the first of additional rounds of job cuts as it implements a new operating plan to reduce or eliminate many of the service and congestion issues that are currently plaguing the company.
Chairman and CEO Lance Fritz noted that “these steps are part of reducing our general and administrative support structure by roughly 30% by 2020.”
Other efforts which may portend a reduction in force include: consolidating operations from three regions — north, south, and west — to two: north and south; eliminating five service units: Denver, Livonia, St. Louis, Sunset, and Twin Cities; and transferring customer service from the Marketing & Sales to Operations.
Like many other large industrial corporations, Union Pacific has announced that it will be reducing its workforce by approximately 700 employees, mostly at its Omaha, Nebraska headquarters. It is anticipated that the cuts will impact 500 management and administrative positions and about 250 hourly positions by mid-September (2017).
Union Pacific, a Fortune-500 company, and the nation’s second largest freight line is profitable but sees that cost-cutting improvements can be made. The key metric driving the cuts is the “operating ratio” which is a railroad’s proxy for profitability. The ratio consists of expressing operating expenses as a percentage of revenue. The company is prepared to spend approximately $90 million, including $15 million for severance pay plus pension benefits and other expenses, to reduce their operating ratio from last quarter’s 61.8 percent to a more desirable 55.5%. The company plans to offer early retirement and buyout plans for employees meeting certain criteria. This should ease the financial and emotional stress on some employees.
Union Pacific is looking at the benefits of running longer trains and more automated systems that replace personnel. One significant adverse impact on the industry came from former President Barack Obama’s climate initiatives and his attack on coal mining and coal-fired power generation plants. The last two years have been rough for the industry. Competitor, CSX announced that it had trimmed its workforce by approximately 2,300 hundred positions and 900 locomotives.
However, an opportunity is where you find it because several realtors in Omaha appear to be looking for relocation sales into a tight and rising housing market.
It can happen to anyone, anytime, anywhere ... are you wondering, Am I Next?