Union Pacific announced Friday that it plans to lay off an unspecified number of employees according to the Omaha World-Herald. The announcement from the railroad said the reason for the layoffs is to continue to improve efficiency in its operations.
Saying that both management and union employees would be impacted, UP said it is maintaining “continuous efforts to streamline operations, while aligning our service product and resources to drive efficiency.” The railroad also said that “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.”
The pandemic has had a tremendous impact on UP’s business, as it has all other railroads and the business community in general. With business down, roads strive to cut expenses to enable their operating ratio go down. The operating ratio represents what percentage of the road’s revenue must be spent to operate the railroad.
Between September 2018 and July 2020, UP has laid off 11,711 employees.
According to UP chairman, president and CEO Lance Fritz, volumes were down 20% during Q2 2020 compared to Q2 2019, and revenue from the same period dropped $500 million, with revenue in Q2 2019 at $1.6 billion and $1.1 billion in Q2 2020.