US-based railroad operator Union Pacific has unveiled plans to cut 475 jobs across its network in the final quarter of this year.

Layoffs are expected to reduce expenses and eliminate 200 contract positions.

Job cuts will help the company to increase its profitability by the end of 2020, reported Reuters. Union Pacific seeks to reduce its operating ratio to at least 60% over the next two years.

The news agency quoted Union Pacific CEO Lance Fritz as saying that the cuts will allow Union Pacific to reduce the cost of its general and administrative operations by 30% before 2020.

“Union Pacific seeks to reduce its operating ratio to at least 60% over the next two years.”

Union Pacific intends to get rid of one of its three operating divisions and centralise its engineering arm, as well as consolidate other activities.

In April, the company expressed uncertainty over its goal of meeting profitability targets for next year due to service issues and traffic on its rail network.

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By GlobalData

Union Pacific serves 23 states in the western part of the US. The company employed 42,114 people until 30 June 2018.

Early this year plans where unveiled to develop a new rail yard in Texas, US, with an investment of $550m.

The company already started the construction of the 1,875-acre facility in Robertson County, nearly 125 miles south of Dallas.