News & Reviews News Wire Union Pacific announces management layoffs in bid to speed decision making

Union Pacific announces management layoffs in bid to speed decision making

By Bill Stephens | November 1, 2023

The cutback represents less than 5% of UP’s management workforce, the railroad says

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An eastbound Union Pacific soda ash unit train climbs Sherman Hill in Wyoming in June 2018. Bill Stephens

OMAHA, Neb. — A round of layoffs are under way today at Union Pacific headquarters as new CEO Jim Vena aims to streamline management and speed up decision making at the sprawling railroad.

“Union Pacific is changing its culture and announced organizational changes to reduce layers, expand spans of control and focus on empowering employees on the front lines to drive decision-making,” spokeswoman Kristen South says. “These changes included some reductions, which represent less than 5% of the total management workforce. All employees whose roles were impacted were given the opportunity to apply for hard-to-hire craft professional roles in other parts of the railroad.”

UP was unable to provide a precise number of layoffs because some people whose jobs are being eliminated will be assigned to special projects that may last several months, while others may move back to union jobs.

On UP’s third-quarter earnings call Oct. 19, Vena emphasized the need to reduce bureaucracy. “We need to make decisions quicker, we need to react quicker, we need to quit having so many layers that slow down the decision making,” Vena said.

Union Pacific CEO Jim Vena. UP

Vena, who served as chief operating officer in 2019 and 2020, returned as CEO on Aug. 14. “Last time I came with one goal: I came to work to drive operational efficiency. I didn’t look at the rest of the company very much, and the rest of the company needs to be looked at. And that’s what we’re doing now,” he said on the earnings call.

“You can’t have nine levels from CEO to the people who actually do the work and expect that the message is clear, decisions are made clear … I want to drive it so we have way less layers. And that means with less layers the people out in the field are empowered to make the right decisions.”

Vena also said on that call that he had spoken with a Wyoming soda ash producer that is expanding production and wanted assurances that UP would be able to provide capacity as part of the build out.

“It was taking us over a year to give them a decision on whether we could do that. We need to change that,” Vena said. “We were able to make the decision in four days. I got it: We can’t make decisions in four days all the time, but we sure can make them in a few weeks instead of months. That’s real important. That’s a change in the way we want to do business.”

During a May speech at the North American Rail Shippers conference, Surface Transportation Board Chairman Martin J. Oberman was critical of UP’s sluggish response to soda ash customers that aim to increase production by as much as 65% over the next five years.

“They have not been able to obtain from UP a concrete plan to increase rail capacity to handle the huge growth,” Oberman says. “Only after I personally intervened in the last few days … has UP even been willing to provide a written description of its plans for the line which moves the Green River soda ash to market. But that response sent to me was labeled confidential. It was not sent to the miners who are the ones who need the information. And unfortunately, while referring to UP’s capacity strategy, UP’s letter was silent as to whether that strategy will enable them to actually move all additional 65,000 carloads.”

Oberman said the lack of capacity assurances from UP has hurt the mining companies’ ability to plan for expansions. “What kind of business needs a government official to lean on it in order to relate to its own customers in order to increase its own sales and make more money? Apparently, only a railroad,” Oberman said.

Overall employment at UP has dropped by 25% since the railroad adopted a Precision Scheduled Railroading operating model in October 2018, according to STB data. The railroad’s ranks of executive officials, staff, and assistants has fallen by 12.4%, while professional and administrative employment has dropped 24%, according to STB data.

Vena outlined the rationale for the layoffs in a memo to employees this afternoon.

8 thoughts on “Union Pacific announces management layoffs in bid to speed decision making

  1. To the extent that reductions are made in Operating, Mechanical, and Engineering managers, the burden will fall most heavily on those at the bottom of the food chain [Old School titles]: Trainmasters, local mech. managers. and Roadmasters; Superintendents, Master Mechanics, and Division Engineers. Territories will lengthen; reliefs will shrink. It has been ever thus.

  2. it’s a start getting rid of layers of unneeded management. it’s amazing how I can call a trucking company and have an answer in an hour about capacity but it takes months to get an answer from the railroad

  3. Railroad middle management is extremely top heavy, they all need to take the up rrs lead on this one. The railroad I work for needs to be the first to follow.

  4. That takes care of the soda ash customers,,,,,what about the chicken feed to Fosters Farms now? How many days, weeks, etc will it take the UP to make a decision before an STB emergency order does it for them?

    Stop listening to the hedge funds and start listening to your customers.

    1. The decisions are being moved closer to the employees doing the job. That has to be positive for everyone, including shippers like Foster Farms. Of course, the proof will be in the pudding. But I think this is the death of the final vestiges of Lance Fritz and his management by accounting methodology. And the effort to save as many jobs as possible, even if by putting some management people back in craft positions is laudable. At least the employees have a choice… TWT

  5. Drew Lewis did this once before :
    Drew closed the headquarters on Park Avenue in New York City and moved it to Bethlehem , PA . A number of managers resigned at that point !

  6. I hope the person whose job it was to create job titles for the corporate positions at the UP doesn’t get the axe.

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