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Nov 15, 2019

CN Rail confirms job cuts as weakening economy cuts into freight volumes

CN Rail confirms it's cutting jobs, doesn't say how many affected


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MONTREAL -- Canadian National Railway Co. is confirming job cuts as it deals with a weakening North American economy that has eroded demand for railroad transportation.

The company said it is "adjusting its resources to demand" but wouldn't say how many people will be affected.

It said some employees will be placed on furlough and there will be reductions in both management and union job numbers.

In October, Canada's largest railroad operator cut its adjusted earnings per share outlook percentage for 2019 to the high single digits, down from predictions of low double-digit growth.

Freight volumes came in below expectations in the third quarter and manufacturing has also fallen off, it said.

The company's CEO Jean-Jacques Ruest told BNN Bloomberg in an Oct. 23 interview that the company would have to adjust to a weakening North American economy

We're in good shape to meet demand: CN Rail CEO

JJ Ruest, president and CEO of CN Rail, joins BNN Bloomberg to talk about the company's latest quarter.

“We adapt our costs to the amount of business that we have," he told BNN Bloomberg. "In a time like this where the North American economy .. is slowing down that means we have to ramp down capital program... and also we have to have less rolling stock and probably less employees.”

“When demand slows down we have to right size,” he added.

The railroad also said it was affected by a slowdown in the British Columbia forestry sector, where high log prices and dwindling timber supply have prompted shutdowns or curtailments in more than two dozen mills, and due to the weather-delayed grain crop on the Prairies.

"As explained during CN's Q3 results, the company is adjusting its resources to demand," said spokesman Alexandre Boule in a statement

"This includes the difficult decision of adjusting its workforce to demand levels by placing some employees on furlough and reducing both management and union job numbers due to a weakening of many sectors of the economy. These adjustments have already started to take place across the network."

- With files from BNN Bloomberg