Railroad company CSX to lay off 1,000 in management
JACKSONVILLE — Employees of railroad giant CSX learned Tuesday that the company will eliminate about 1,000 management positions.
The layoffs include positions both in the field and at CSX Corp. (CSX) headquarters here, the company told employees in e-mail. Managers affected will be notified in mid to late March.
CSX spokesman Gary Sease called the layoffs an "involuntary separation program." Jacksonville alone has more than 2,500 employees classified as management.
The announcement came on the same day that CSX announced the retirement of its chief executive and chairman, Michael Ward, and President Clarence Gooden, effective at the end of May.
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CSX officials are discussing the possibility bringing in Hunter Harrison, a former head of Canadian Pacific Railway, as their new CEO. A hedge fund called Mantle Ridge, which owns nearly 5% of CSX stock, is backing Harrison, but The (Toronto) Globe and Mail reported that talks have stalled between the company and Harrison because of what CSX is calling extraordinary demands for pay and control of the boardroom.
Harrison is known in the railway business as a turnaround specialist who improves companies' bottom lines by reducing workforce.
In October 2014, investors were buoyed when word leaked out that Canadian Pacific had proposed a merger with CSX, but CSX rebuffed the offer. CSX said Ward's and Gooden's retirements are not "intended to preempt or otherwise affect any discussions" CSX is having with Harrison and Mantle Ridge.
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At midday, CSX's stock price was up by less than 1% to $48.90. It hit its 52-week low of $23.58 in February of last year, and the year's high of $49.13 on Jan. 26 before news of talks with Harrison were confirmed.
Managers who are laid off will receive enhanced severance pay and pension benefits along with outplacement services, CSX said in its email. It also plans to put a voluntary separation program in place.
The company, one of downtown Jacksonville's largest, employs nearly 36,000 people in the eastern U.S. in its railway, real estate and technology operations.
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