CSX has laid off 166 management employees, about 5% of the non-union workforce, in cuts announced to employees Wednesday.
Other cost-cutting moves, according to Trains sources, include cuts to some management benefits and furloughs to 193 conductors, including 61 covered by the railroad’s Baltimore & Ohio union agreement and 132 on former C&O, Seaboard Coast Line, and Louisville & Nashville lines. An additional 157 conductors were placed in unassigned status, meaning they were not awarded jobs for the week when bids opened. Travel has also been cut back and extra boards have been trimmed.
In a message to employees, chief executive Steve Angel said the positions were eliminated “as part of our efforts to streamline the organization given challenging economic conditions.” Those affected had been informed before the message was released.
“We understand the effect this decision has on them and their families,” Angel said, “and we are committed to supporting them with competitive severance packages and employment transition services.”
Angel replaced Joe Hinrichs as CSX (NASDAQ: CSX) CEO in September, at a time when activist investor Ancora Holdings was pressuring the company to oust Hinrichs. Ancora said a change was warranted because of what it called “anemic stockholder returns” and “disastrous operational performance,” as well as the railroad’s failure to pursue a merger at a time when there were indications that Union Pacific (NYSE: UNP) and Norfolk Southern (NYSE: NSC) were in merger talks.
CSX’s fourth-quarter freight traffic was up 1.3%. But more profitable merchandise traffic fell 2.1% while lower-margin intermodal volume was up 5.2%. Chief Financial Officer Kevin Boone told an investor conference in December that fourth-quarter earnings would take a $40 million hit because of lower coal shipments tied to an Oct. 25 derailment, as well as lower than expected auto shipments related to an aluminum shortage. Those issues come on the heels of a third quarter that saw an 8% decline in operating income.
CSX will release fourth-quarter earnings on Jan. 22.
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