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Canadian Pacific Railway will eliminate some 4,500 employee and contractor positions by 2016, the new chief executive of Canada's second largest railway announced Tuesday.
Chief executive Hunter Harrison said they have already made progress and expect 1,700 positions to be eliminated by year end.
CP's total workforce is 19,500, which includes employees and contractors. The Calgary, Alberta-based company said the reductions will be achieved through job cuts, attrition and fewer contractors as part of its restructuring plan. Harrison said at the company's annual investor conference in New York that the railway is "fortunate" to have a high attrition rate of eight to nine percent, given its older workforce.
Harrison is an American-born retired CEO of Canadian National Railway and is credited with turning the Montreal-based company into the most efficient major railway in North America.
Earlier this year, former CP chief executive Fred Green announced his departure, ending a months-long battle that pitted New York activist investor Bill Ackman against the board of directors. The railroad has since elected a new board and named Harrison CEO.
Harrison said he will relocate CP's corporate headquarters in downtown Calgary to a new office space at a CP-owned yard. CP will also explore options including the potential to sell surplus real estate, and the Delaware and Hudson line in the U.S. Northeast.
"We have only just started this journey to being a more competitive railway. We will continue to drive our service offering while focusing on taking unproductive costs out of the business," Harrison said in a statement.
Earlier Tuesday, CP said it is looking into the possibility of selling 660 miles (1,062 kilometers) of track in South Dakota and three surrounding states. CP in 2007 bought 2,500 miles (4,023 kilometers) of track and equipment from South Dakota-based DM&E and its subsidiaries for $1.5 billion. CP said it was "inviting expressions of interest."
Canadian Pacific Railway moves $50 billion worth of freight each year, including more than half of Canada's potash, wheat and coal.