FORT WORTH, Texas — BNSF Railway eliminated several hundred management positions at its headquarters and across the system last week as part of a belt-tightening move.
The railroad did not disclose how many jobs were affected, but people familiar with the matter say that BNSF cut 8% of its management workforce. That would translate into roughly 400 positions based on the January employment figures the railroad reported to the Surface Transportation Board.
“As a business tied to the industrial and consumer economies, we must always adapt our resources to meet demand. The freight market faced significant headwinds last year and our outlook for 2024 remains uncertain, as it does for many of our customers,” the railroad said in a statement. “To ensure our long-term success, it is necessary to make workforce decisions that respond to a complex and ever-changing freight environment. While these decisions are never easy, we must position ourselves to continue providing the industry-leading service our customers expect.”
The cutbacks come less than two weeks after Warren Buffett, chairman of BNSF parent Berkshire Hathaway, said the railroad’s 14% earnings decline in 2023 was deeper than expected. The railway’s operating ratio increased 2.5 points to 68.4% last year, which lagged the other five big systems.
“Though BNSF carries more freight and spends more on capital expenditures than any of the five other major North American railroads, its profit margins have slipped relative to all five since our purchase. I believe that our vast service territory is second to none and that therefore our margin comparisons can and should improve,” Buffett wrote in his annual letter to shareholders.
BNSF furloughed 362 mechanical workers across the system earlier this month, according to a union tally. Those workers were offered positions at BNSF shops that are currently hiring.
BNSF is not the only railroad to reduce its workforce in recent months.
Norfolk Southern in January said it would eliminate 7% of its management and staff positions through a voluntary severance program. The cutbacks were intended to offset hiring in the operating department, including new mechanical jobs, and came amid pressure from an activist investor.
Union Pacific in November reduced its management workforce by nearly 5% in what it said was a bid to speed decision-making.
Autonomous trains.
Why not autonomous management?
When I started working at Santa Fe in January 1990 one of the first things I heard Mike Haverty say in a staff meeting was “You can’t starve a railroad into prosperity.”
It was true then and it is still true today.
These weren’t redundant transmitter or HR postitons. It was MECHANICAL. Buffet needs to retire, this is ludicrous. The motor rostive fleet is in disrepair. Every consist that is sent down usually has one unit good for lead and still has MULTIPLE defects. I’d expect the FRA to step up, but they’ve proven themselves worthless. Just waiting for another East Palestine.
I can’t help but wonder if letting Schneider go to make JBH happy was a mistake.
Yup. You nailed it.
Not quite right Dennis. The Hunt business is iherently more priftable than the Schnider was. They key here is to pivot quickly and find more Hunt business as
Why not both? BNSF has plenty of capacity.
The cult of the OR, the ghost of Harrison and vultures from hedge funds set rail transportation policy, including what Amtrak is allowed to do. Not unlike the gilded age Robber Barrons history rhymes as Mark Twain said. Today Robber Barrons are called “philanthopists” instead of oligarchs.
This cut is difficult to understand. Where was all the fat and what was frying? And Buffett was famous for his “hands off” delegation to management at BNSF. There is no Wall St. pressure here…or is it cognitive declension?
Wall street has spoken. Get your operating ratio better!
There’s almost always to much management at any company…you don’t need a flat shaped pyramid management structure, it should look more like an A frame house if you want efficient management.
Railroads are the bellwether. Rough track ahead.