Amtrak warns additional 2,400 redundancies without federal support

9 October 2020 (Last Updated October 9th, 2020 12:00)

US-based passenger railway service Amtrak has warned that without federal funding it would be forced to reduce services and suspend projects, which will lead to the loss of an additional 2,400 jobs.

Amtrak warns additional 2,400 redundancies without federal support
An electric Amtrak train led by an ACS-64 locomotive running through Maryland on the Northeast Corridor. Credit: Ryan Stavely.

US-based passenger railway service Amtrak has warned that without federal funding it would be forced to reduce services and suspend projects, which will lead to the loss of an additional 2,400 jobs.

This comes after Amtrak placed a request with the US Congress for up to $4.86bn this fiscal, much higher compared to the usual $2bn in annual support, reported Reuters.

The railroad’s ridership plummeted following the Covid-19 crisis. Currently, business is around 25% of pre-pandemic levels.

Amtrak expects that in fiscal year 2021 (FY21) ridership and revenue will improve to around 40% of pre-Covid levels, much weaker than anticipated.

In the letter to Congress, Amtrak President and CEO Bill Flynn said: “We have seen that our ridership is not returning as quickly or at the levels that we had hoped for, and we updated our forecast for FY21.

“We now anticipate needing up to $4.86bn in FY21 to support the company and our employees through this unprecedented situation.”

The unavailability of federal funding will also halt several capital projects and defer procurement programmes, the company said.

Flynn added in the letter: “To manage this situation, Amtrak will work to adjust its operating and capital spending plans during this short term CR, with the aim of minimising further impacts on our customers and employees.

“However, if the FY20 funding level is extended beyond December 11 2020 and supplemental funding has not yet been provided, we will be unable to avoid more drastic impacts that could have long lasting effects on our Northeast Corridor infrastructure and the national rail system.”

Notably, Amtrak announced plans to furlough more than 2,000 workers last month due to weakening travel demand.