Union Pacific to Cut 2,000 Jobs

O M A H A, Neb., Dec. 28 -- Citing rising fuel prices, harsh winterweather and growing signs of an economic slowdown, the Union Pacific has announced plans to eliminate 2,000 jobs inthe coming months.

The job cuts are in addition to 1,600 jobs that have beeneliminated since August as the result of the railroad’s 1995 mergerwith Southern Pacific Rail and 4,638 seasonal winter layoffsannounced earlier this month.

The Omaha, Neb.-based company said Wednesday severance costs associatedwith the jobs cuts will mean an after-tax charge of roughly $70million in fourth quarter of 2000, or 26 cents per fully dilutedshare.

Railroad spokesman John Bromley said “a few” merger reductionsare included in the new figures. The company hoped to accomplishthe reductions through attrition but will now accelerate its earlyretirement plan.

“About 1,000 of them will go by attrition and about 1,000 willbe offered an enhanced pension plan,” Bromley said.

Cuts to Ease Renewed ProblemsBusiness at the railroad had rebounded from difficulties itfaced following the merger.

“We peaked out in October and since then it’s dropped off,”Bromley said. “Our customers are telling us their businesses areslowing down.”

Details of the jobs reduction program will be finalized bymid-January, he said. Employees will have an opportunity toconsider how the options apply to them.

The cuts are expected across the entire operation and willaffect the union and management sides of the company, Bromley said.

The reductions should be completed by the end of February, hesaid.

Word of the jobs cuts came in a release from Union Pacific inwhich the railroad said it will reduce planned capital spending in2001 and employment levels.

The railroad company said it expects fourth quarter earnings,before the one-time charge, to range between 87 cents and 90 centsper share. Analysts surveyed by First Call/Thomson Financial hadbeen anticipating fourth-quarter earnings of 93 cents per share.The company reported earnings of 95 cents per share in the fourthquarter of 1999.