Amtrak to furlough more than 2,000 employees at the end of September

Amtrak said it will furlough more than 2,000 employees at the end of September, as it continues to try to recover from financial losses suffered due to the coronavirus pandemic.

The number is less than the roughly 3,700 the railroad said in May could face furloughs. Other cost-cutting efforts, including the voluntary departure of more than 500 employees, allowed the company to reduce the number, officials said.

The railroad will also make service cuts for the fiscal year that begins Oct. 1.

“While we have implemented initiatives to minimize the number of furloughs and involuntary separations, significant reductions remain necessary due to the slow recovery of ridership and revenue,” Qiana Spain, Amtrak’s executive vice president and chief human resource officer, said in a memo to employees this week.

Demand for service – and the company’s revenue – plummeted to historic lows starting in mid-March as states implemented coronavirus restrictions. Even as ridership has began to rebound, the company says estimates that ridership in the next fiscal year may drop to 16 million, or roughly 50 percent of pre-pandemic levels.

Downsizing operations is necessary, chief executive William Flynn said recently. Amtrak has also requested nearly $1.5 billion in supplemental funding from the federal government to maintain minimum service levels.

Amtrak will furlough 1,950 unionized workers and 100 management positions as part of cutbacks, according to the memo sent to workers. The company says employees who are furloughed between Oct. 1 and Dec. 31 of this year will have their medical benefits extended until Sept. 30, 2021.

“It is our hope to recall furloughed employees as soon as business conditions or funding permits,” Spain said in the memo.

William DeCarlo, vice president and legislative director for the Transportation Communication Union, said in an interview last month that the company should have asked for more federal aid sooner to avert impacting jobs. The TCU is Amtrak’s largest union, representing about 7,500 workers, including 326 slated to be furloughed.

TCU and other unions representing Amtrak workers have been lobbying Congress for more relief money and pleading for intervention to keep the workers and the trains running. The passenger railroad receives about $2 billion in federal subsidies annually to cover operations for its national and Northeast networks.

Most Amtrak long-distance trains will operate three times a week instead of daily, while the carrier is also planning reductions in train frequencies in the Northeast Corridor, the busiest in its network, and on its state-funded routes.

Flynn said in July that the company will restore service levels as demand normalizes.

Union leaders, however, say the job and service reductions are shortsighted and that the net savings for Amtrak associated with furloughing of employees will be “relatively minimal.”

A recent analysis by the TCU concluded that Amtrak is likely to save less than $50 million after factoring in all costs attributable to the furloughs. That includes costs of continued health benefits and hefty training costs Amtrak would assume when it is time to rehire.

The union said the voluntary separation program that resulted in the exit of 510 workers carried its own cost of nearly $7.4 million. That includes separation payments of $20,000 to management and $10,000 to union employees, according to the union.

“The skilled workforce that Amtrak relies on to operate and deliver a top-quality experience would be decimated by these cuts, and retraining employees after the pandemic abates would not only cost Amtrak millions, but would inevitably delay and complicate Amtrak’s ability to restart in a timely manner,” according to the report.