Canadian Pacific, Employer of 1.6K in MN, Cutting 4.5K Jobs
Canadian Pacific Railway, which employs roughly 1,600 in Minnesota and has its U.S. headquarters in Minneapolis, said Tuesday that it intends to cut 4,500 jobs during the next four years.
That represents about 23 percent of the company’s work force; Canadian Pacific has roughly 19,500 workers in the United States and Canada, including both employees and contract workers, according to spokesman Ed Greenberg.
When asked how many Minnesota jobs will be eliminated, Greenberg said via email that “there is no formal targeted breakdown for each region,” adding that “the reductions will be achieved across the entire network.”
The company, which is based in Calgary, Alberta, Canada, said that it has “already made progress on this front” and expects 1,700 positions to be eliminated by the end of this year. The company plans to reduce its work force in part through job cuts, but Greenberg said it will be accomplished “mostly through natural attrition and fewer contractors.”
The job cuts were announced in conjunction with a series of other restructuring moves. Canadian Pacific said it is considering the sale of a 660-mile rail line that connects the southwestern Minnesota city of Tracy and other Midwestern states. It also said that it will “explore options to maximize full value of existing and anticipated surplus real estate holdings” and relocate its current Canadian headquarters to a new Calgary office.
Greenberg described Minneapolis as “the hub of our U.S. operations,” adding that the company “demonstrated our commitment to the city” in August, when it relocated its U.S. headquarters from the Soo Line Building in downtown Minneapolis to the nearby One Financial Plaza, which was subsequently renamed Canadian Pacific Plaza.
President and CEO E. Hunter Harrison said in a statement that the company has made a number of changes during the past five months to help make Canadian Pacific more competitive. Among them: a new leadership team, revamped service resulting in faster transit times for customers, the closure of certain terminals to cut costs, and a reduction of locomotives and leased rail cars.
The company said it expects its restructuring efforts to result in compound annual revenue growth of between 4 and 7 percent through 2016.
According to a Bloomberg report, Harrison was hired following a proxy fight by hedge-fund manager Bill Ackman, who backed him for the job as he sought to boost investor returns.
“We are hearing feedback from customers that they are seeing and liking the results,” Harrison said in a statement. “The reduced number of assets and the decentralized decision-making within the organization will allow us to appropriately size to any changes in market conditions.”
Tuesday’s announcement comes one day after Canadian Pacific announced that it would “defer indefinitely” its plans to extend its railroad network with new track in Wyoming, citing weakened demand for coal. The company currently runs trains through Rochester, but they do not include coal, according to a report by the Associated Press. Rochester officials and leaders from the Mayo Clinic had reportedly expressed concerns about the proposed expansion, which could have brought coal trains on lines that run near Mayo’s headquarters.