Union-Pacific Says It Will Need 3,000 Fewer Workers in 2020

Railroad, like its rivals, continues to streamline operations; quarterly profit fell 10%


Paul Ziobro

for wsj.com

Union Pacific Corp. UNP -2.47% plans to run its railroad with nearly 3,000 fewer workers this year as the company pushes ahead with a new operating plan that runs fewer, longer trains.

The Omaha, Neb.-based company said it plans to reduce its average number of workers by around 8% in 2020 after reducing its staffing by 11% in 2019. The railroad averaged around 37,500 workers during 2019 and nearly 42,000 during 2018.

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.

Union Pacific locomotives and railcars in Kansas City, Mo. The railroad operator plans to cut its average number of workers by about 8% this year. Photo: Whitney Curtis/Bloomberg News

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. The company averaged 34,500 workers during the fourth quarter.

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.

Rival CSX Corp., which operates in the eastern U.S. and is further along in implementing precision-scheduled railroading, ended 2019 with about 20,900 people, nearly 1,600 fewer jobs than the previous year. It had 27,000 in December 2016 before the late Hunter Harrison was named CEO and revamped the company.

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 3.46% on Thursday.

Write to Paul Ziobro at Paul.Ziobro@wsj.com

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