Canadian Pacific Railway will reduce its North American workforce by as many as 1,000 people this year in response to reduced freight volumes, lower demand for rail services and improved operational efficiencies that reduce labour requirements.
In a Jan. 21 conference call with investors, CP chief executive Hunter Harrison said most of the job cuts would take place between now and the end of May.
The company has reduced its workforce by 6,000 to 7,000 people over the past four years, primarily through attrition.
In 2015 alone, the company’s head count was reduced by roughly 12 percent.
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“I think with some of the operating initiatives … and productivity gains … there are probably another 1,000 additional heads to come out, potentially in 2016,” Harrison said.
“This is across the board — labour, management, everywhere…
“Most will have kicked in by mid-second quarter, for sure.”
CP president Keith Creel said productivity gains combined with lower demand for rail services has prompted the company to reduce costs.
“Simply said, less demand, when you put that in conjunction with continuing improvements in productivity, must produce an environment where you have fewer assets — fewer locomotives, fewer cars, fewer people,” Creel said.
The company also has close to 600 locomotives stored, a reflection of lower traffic volumes and a sluggish economic outlook.
On a full year basis, CP generated record revenues of $6.71 billion in 2015.
However, its fourth quarter performance fell short of expectations, hampered by sluggish North American demand for rail service and falling commodity prices.
The Calgary-based company reported adjusted earnings per share of $2.72 in the three months ending Dec. 31, 2015, slightly below analysts’ expectations of $2.76.
Contact brian.cross@producer.com
