Amtrak Plans Deep Workforce Cuts Ahead of Slow Pandemic Recovery

• Cuts of as much as 20% designed to save $350 million next year
• Ridership is down 95% from last year on depressed demand

Amtrak is preparing to slash its workforce by as much as 20% in its upcoming fiscal year as the U.S.’s lone nationwide passenger railroad braces for a slow recovery to ridership that’s been gutted by the coronavirus pandemic.

Amtrak projects ridership will return to just half of 2019 levels in its upcoming fiscal year beginning in October, Amtrak Chief Executive Officer William Flynn said in a memo to employees. The railroad has already reduced service and taken other cost-cutting measures amid a 95% decline in ridership and revenue but further reductions are needed to align with a sustained period of depressed demand, he said.

“Congress expects us to operate like any other business – and while they have supported us with emergency funding for FY 2020, they are not going to support us endlessly to run mostly empty trains,” Flynn said in the memo, provided by Amtrak and reported earlier by the Wall Street Journal.

The workforce reductions will account for $350 million of a plan to slash operating costs by $500 million next year, Flynn said in a separate letter to top U.S. lawmakers on Monday. In that letter, Flynn said the railroad would need nearly $1.5 billion in additional funding from congressional appropriators in addition to the internal cuts being planned and $1 billion in emergency aid provided by the $2.2 trillion virus stimulus bill.

Among the measures Amtrak is considering are retirement and voluntary buyouts, unpaid time off, extended salary and benefit cuts, furloughs and layoffs, Flynn said in the letter to lawmakers. Those options would apply to both labor and management positions across the company, he added.

“Our first step will be to offer incentives for voluntary separations and retirements before we resort to involuntary separations,” he wrote in the memo.

An Amtrak spokeswoman declined to comment further.

Amtrak reported its best financial performance on record during the fiscal year that ended in September. It posted a $29 million adjusted operating loss -- its smallest ever -- while setting records for revenue and ridership. Under generally accepted accounting principles, Amtrak’s net loss was nearly $875 million. And before the pandemic gutted all forms of travel, Amtrak was on a course to post its first-ever operating profit.

The railroad’s future looks very different now.

“Furthermore, when demand returns, we anticipate that changed behaviors, such as increased telework and reduced discretionary income, will likely impact ridership, along with capacity limits that may be needed to achieve social distancing on our trains,” Flynn wrote to lawmakers.