UP has notified the mechanical department that 450 positions will be eliminated across the system this month. In addition, 250 other jobs were eliminated, most of them in Omaha, the Omaha World-Herald reported, citing a UP memo to employees.
The moves were not unexpected. On the railroad’s earnings call in January, executives said they were banking on $500 million in productivity improvements this year, a figure that would include an unspecified number of job cuts.
The mechanical department furloughs come as UP is reducing the size of its active locomotive and car fleets.
“We are not providing location-specific information; however, I can confirm Pine Bluff and Hinkle were impacted and the Pine Bluff locomotive shop is closing,” UP spokeswoman Kristen South says. “The workforce reduction is a result of a reduced locomotive fleet. As we look for ways to streamline our work under Unified Plan 2020, we have removed more than 1,200 locomotives and approximately 30,000 freight cars from our network since Aug. 1.”
The fleet reduction is partly due to the easing of congestion on UP’s system and partly due to operational improvements since the Oct. 1 launch of an operating plan based on the principles of Precision Scheduled Railroading.
As the railroad moves the same amount of tonnage on fewer trains it requires fewer locomotives and freight cars — and not as many people to maintain them.
UP eventually will require fewer train crews, as well, as it reduces train starts by moving tonnage on longer trains. Last month, executives said the railroad was exploring ways to shuffle its capital budget for this year to allow for siding extensions across the system in order to permit operation of ever-longer trains.
Pine Bluff shop workers told the Pine Bluff Commercial newspaper that 75 employees lost their jobs, leaving a workforce of 23 people at the former Cotton Belt facility.
It was unclear how many employees were furloughed at the Hinkle locomotive shop.
UP closed its locomotive shop in El Paso, Texas, in November.
UP employed 8,635 people in maintenance of equipment roles in December, according to data filed with the Surface Transportation Board, meaning the layoffs represent about 5 percent of the mechanical department’s headcount.
The railroad’s total employment stood at 41,696 in the fourth quarter, according to the railroad’s financial report. That was up slightly from 41,589 a year ago, largely due to the hiring of more train and engine crews.
UP posted record earnings in 2018 but has been cutting jobs as part of its drive to reach an operating ratio of 60 percent by 2020 and, ultimately, 55 percent. Most recently, the railroad cut nearly 700 positions in late 2018.
