CP to eliminate 1,000 jobs in 2016

Canadian Pacific expects to reduce its workforce by about 1,000 employees in 2016, company officials said during an earnings conference call with analysts yesterday.

The job reductions are necessary to adjust to lower traffic volumes. Positions will be eliminated across the board, but most of the unionized positions will be eliminated by attrition, said Chief Executive Officer E. Hunter Harrison. Most of the cuts will have kicked in by the middle of 2016, he said.

Since 2012, the railroad has eliminated 6,000 to 7,000 positions, mostly through attrition.

"We feel like through some productivity gains and efficiencies, there are probably 1,000 additional heads to come out in 2016," Harrison said in response to an analyst's question on headcount. "So there's still room there, and more to accomplish."

CP reported Thursday that net income for full-year 2015 was $1.35 billion on revenue of $6.7 billion, compared with net income of $1.47 billion on revenue of $6.6 billion in 2014. Total revenue last year set a record, according to CP.

Unifor, Canada's largest private-sector labor union, expressed concern about the CP's staff cuts in light of a Transport Canada order that the Class I fix scheduling issues that have created "excessive fatigue" in some train crew members.

"It's regrettable that CP has decided to cut jobs while they are posting record profits and revenue," said Unifor National Rail Director Brian Stevens in a press release. "Last year they eliminated 1,800 staff; now they're putting another 1,000 out of work despite the fact that they brought in $1.35 billion in net income in 2015."

Earlier this week, Transport Canada announced it ordered CP to resolve scheduling issues and related excessive fatigue in employees. The agency said CP did not comply with federal rules related to work/rest for extended service run train crews. The issues were discovered in CP locations in British Columbia, according to a Transport Canada press release.