Union Pacific will lay off an unspecified number of employees across the railroad’s system as the company continues its push for operational efficiency.
The company did not publicly detail the number of employees affected, and the Nebraska Department of Labor says it does not have a notification from U.P.
As the pandemic shakes the economy, U.P. has taken a hit to its finances from lower shipping volumes.
But in a statement issued Friday, the company said the layoffs were part of the railroad’s “continuous efforts to streamline operations, while aligning our service product and resources to drive efficiency.” The company said both management and union employees would be reduced.
The company’s statement said: “These are difficult decisions; however, we remain committed to providing our customers safe, efficient and reliable service that ensures Union Pacific remains a strong and competitive company.”
Union Pacific is changing its operations through an effort called “precision scheduled railroading,” which involves running trains faster and more efficiently.
In September 2018, the month U.P. announced its new plan, the company had 44,531 employees, according to a company filing with the U.S. Surface Transportation Board.
By July 2019, U.P. had cut that to 40,491 employees. This July, that was down to 32,820, according to the data.
In July, Lance Fritz, U.P.’s chairman, president and CEO, said the second quarter was “very challenging” as shipping volume dropped 20% over second quarter 2019 because of the COVID-19 pandemic.
The company’s net income dropped $500 million quarter-to-quarter to $1.1 billion from $1.6 billion last year.
Fritz said the company was able to largely mitigate the impact of lower volume through efficiencies. But the company also reported its “operating ratio” increased in a quarterly comparison — U.P.’s drive is to lower that ratio. The ratio is essentially the percentage of each dollar received that is spent running the railroad.