Multiple news sources are citing managements reaction as freight rail traffic and profits slowed in the second quarter.
Union Pacific President and CEO Lance Fritz issued a statement to non-agreement employees on August 12, 2015 announcing a “workforce reduction initiative”… The freight rail company “plans to reduce its management workforce in Omaha and other locations by several hundred people in the coming months through a combination of anticipated attrition and terminations.”
One news source says that “the news of the mass firings follows a flat 2015 second-quarter for UP”… …as the railroad reported net income of $1.2 billion, compared with 2014 net income of $1.3 billion. Also, rail operating revenue decrease of 10%, and operating income was down 11%.
A couple of hundred people could translate in to a range of $20 to $25 million in annual salary and overhead savings. It appears as written that there is also what the railroads call a “furlough” of more than 1,000 craft professionals… CEO Fritz said. …“for our company’s long-term success, we must take these painful actions to balance workforce levels with today’s business demands.”
Layoffs are a traditional way for North American private railways to control costs in the face of falling revenues. They do not receive government subsidies. They report to private investors (shareholders).