CSX Corp. said Tuesday that it seeks to cut 300 jobs, mostly in its Jacksonville headquarters staff, by offering voluntary buyouts to some employees.
The railroad company said employees who are least 53 with at least 19 years of service by the end of this year are eligible for the program.
CSX is offering those employees two options. They can either take a credit of two years of age and one year of service and retire, or take a separation payment of one year’s salary.
CSX spokeswoman Melanie Cost said by email that the voluntary separation program is part of the company’s long-term planning.
“The decision has been made to streamline the management organization to better reflect the realities of the company’s current and future markets. This will help assure that CSX will continue to deliver compelling shareholder value, with superior safety, customer service and efficiency,” she said.
CSX employs more than 31,000 people throughout its system in the Eastern U.S. and about 3,500 to 4,000 jobs in Jacksonville, including headquarters staff and rail employees.
According to a story posted on the website of logistics magazine DC Velocity, CSX Chairman and CEO Michael Ward informed employees of the plan in a letter. The letter said CSX might need to lay off employees starting in January if the voluntary program does not meet its target of 300 jobs.
Ward said CSX also plans to cut so-called nonessential costs by 10 percent, DC Velocity reported. Those cuts, also by year-end, will come from CSX’s general and administrative budgets.
Ward wrote that CSX will scrutinize travel, training, and materials costs to ensure they meet “core business objectives.”
The 2015 merit increases will be delayed until July 1, and no merit increases will be paid next year to executives at and above the level of assistant vice president, according to the letter, DC Velocity said.
One of CSX’s major long-term goals has been to reduce its operating ratio –– operating expenses divided by total revenue –– to a percentage in the mid-60s. The operating ratio was 69.7 percent in the third quarter this year.
CSX is Jacksonville’s largest company with revenue projected to exceed $12 billion this
year.
The voluntary separation program was revealed about a month after CSX rebuffed an attempt by Canadian Pacific Railway Ltd. to negotiate a merger of the two railroad systems.
In an interview with the Daily Record last month, Ward wouldn’t discuss merger rumors but said he expects CSX to remain in Jacksonville for a long time and said that local jobs could
increase.
“We think that, if anything, we’ll probably grow that employee base,” he said.
Sources have told the Daily Record that CSX is considering buying the 550 Water Street Building, which sits next to its 500 Water St. headquarters. CSX leases almost 75 percent of the 14-story structure and signed a 15-year lease there in 2011.
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