Union Pacific (NYSE:UNP)
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2 Months : From Dec 2019 to Feb 2020
By Paul Ziobro
Union Pacific Corp. plans to cut nearly 3,000 jobs this year as the railroad operator pushes ahead with its new operating plan.
The Omaha, Neb.-based company said it plans to cut its workforce by around 8% this year after reductions of 11% in 2019. The railroad averaged around 37,500 workers last year.
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.
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.
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 1.9% on Thursday.
Allison Prang contributed to this article.
Write to Paul Ziobro at Paul.Ziobro@wsj.com
(END) Dow Jones Newswires
January 23, 2020 17:36 ET (22:36 GMT)
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