Aurizon Braces For More Job Cuts and Property Sale

In a bid to cut expenses and manage the company better, Aurizon is planning on reducing its operation cost for the next two years. In order to do this, the company is set on making job cuts and sales in property, so that it will be able to shave off $230 Million worth of operation expenses.

About $100 million in “support costs” will be shaved down within two years, where $60 million will come from labour cost. Essentially, what this means is that workers will be laid off and the company will then go for cheaper alternatives like outsourcing or hiring contractors.

The number of job cuts, however, still remains undetermined. But labour agreements between many of its workers are set for renewal next year.

Since two years ago, the company has already cut its work force by 1600, by offering voluntary redundancy programs.

Meanwhile, about $25 million real estate costs will be reduced, which will include selling of properties that no longer serve its purpose.

The company says that its goal is to ultimately provide “labour flexibility” as well as “productivity improvements” that will be able to help the company save up to $70 Million to $130 Million.

The company disclosed that for the year ending this June, it was already able to haul about 194 million tonnes of coal. This number was within their expected goal. While doing a forecast last February, Aurizon actually set its goal between 192 to 195 million tonnes.

Aurizon, which was formerly called QR National, is the largest listed rail company in the stock market. At the trading floor today, shares of Aurizon improved to 2.5% following the announcement, while the annual report will be released by next month.