CALGARY—Canada’s two largest railways are reporting job cuts of up to 900 people as falling shipments of oil, grain, and coal take a toll on their industry.
Canadian Pacific Railway Ltd. said Tuesday, July 21, that it plans to slash 200 to 300 jobs later this year as the sector faces lower-than-expected freight volumes.
“If business goes down and demand reduces, then obviously head count is going to go down in lockstep with it,” president and chief operating officer Keith Creel told investors in a conference call.
CP’s planned job cuts come a day after Canadian National Railway announced it had cut 600 jobs so far this year and has implemented a hiring freeze.
CN, which had about 25,000 employees at the end of last month, says it expects to recall many of those laid off by the middle of next year.
CP’s latest cuts would be on top of the roughly 700 jobs it has eliminated in the past year, leaving the company with 14,100 employees.
The job losses were announced as the railway reported second-quarter results that saw its revenue tick lower to $1.65 billion compared with $1.68 billion in the same period last year.
In its outlook, CP said it expects to see 2 to 3 percent revenue growth this year, down from April expectations of 7 to 8 percent. It also revised its annual adjusted diluted earnings per share to total $10 to $10.40, down from an expected $10.63 or more at the end of the last quarter.
The railway said it earned $390 million or $2.36 per diluted share in the quarter that ended June 30, up from $371 million or $2.11 per diluted share a year ago.
On an adjusted basis, the railway says its earnings per share were up 16 percent at $2.45, while its operating ratio—which tracks operating costs as a percentage of revenue—improved to 60.9 percent.
CP maintained its expectation that its operating ratio would be below 62 percent.
In May, the Superior Court of Quebec approved a class-action lawsuit against CP by residents of Lac-Megantic over the train disaster that killed 47 people in July 2013. CP said July 21 it was too early to determine any potential liability or losses and reiterated that it is not liable for the tragedy.
CP also lost a court challenge last week of a $430 million settlement fund proposal for more than 4,000 victims and creditors in connection with the derailment and explosion. The company wanted the settlement ruled unfair because it would limit CP’s ability to sue other firms involved. It has said it would review the ruling.