Union Pacific to lay off 750 workers

Union Pacific (NYSE:UNP) said Wednesday it will lay off 750 workers in an effort to cut costs.

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The layoffs include 500 managers and 250 other workers. The move, which eliminates about 8% of Union Pacific's managers, will save about $110 million annually.

The railroad told the affected workers Wednesday that their jobs will be eliminated by mid-September.

"Union Pacific for some time has leveraged employee attrition and technology to reduce general and administrative costs," CEO Lance Fritz said. "Unfortunately, attrition alone will not keep pace with our need and ability to reduce these costs."

Union Pacific said the layoffs are expected to produce about $110 million in annual cost savings, but the railroad will record $90 million in pretax severance costs — mostly in the third quarter — because of them.

Edward Jones analyst Dan Sherman said the layoffs suggest Union Pacific's cost-cutting efforts weren't keeping up with the railroad's goals.

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