Union Pacific announces weeks of unpaid leave and pay cuts for employees, executives

Facing an “unprecedented drop” in freight traffic, Union Pacific President and CEO Lance Fritz announced Tuesday four weeks of required unpaid leave and pay cuts for executives and board members of the Omaha-based railroad.

“Many of our customers have reduced or halted production and overall freight transportation has declined dramatically,” wrote Fritz in an email to Union Pacific employees.

“Union Pacific has enacted several cost-saving measures, but they are not sufficient to offset the significant decline in volume. Accordingly, the railroad also is implementing changes that will impact our workforce,” a statement from the company said.

Every non-union UP employee will take one week of unpaid leave in May, June, July and August, according to Fritz’s memo. Executives and board members will see a 25% reduction in pay over that same time period.

“I considered many possible scenarios, including furloughs or permanent workforce reductions,” wrote Fritz in the email. Fritz said ultimately the leaves and pay cuts meet UP’s short-term needs.

Fritz noted UP has canceled its 2020 summer internship program, reduced or eliminated non-agreement hiring, and eliminated nonessential spending through the end of 2020.