Amtrak is reducing up to 20% of its staff, the company said Tuesday, as the coronavirus crisis wreaks havoc on the passenger railroad service and substantially cuts into its revenue.
The reductions will amount to 3,700 jobs. In an email to the company's 18,500 workers, chief executive William Flynn announced that the "essential adjustments" will be completed by October, saying the company will offer "incentives for separations and retirements before we resort to involuntary separations."
"During the past few months, we have witnessed almost unimaginable change to our world — and also to our business," Flynn said. "This reduction is necessary to ensure we have a sustainable Amtrak that can continue to make critical investments in our core and long-term growth strategies, while also keeping safety as our top priority."
On Monday, Amtrak requested nearly $1.5 billion in supplemental funding from the federal government to maintain "minimum service levels," anticipating that ridership will not recover to pre-pandemic levels in fiscal 2021.
In a letter to Congress, Flynn said that the economic fallout from the pandemic has become "clearer" and that the company needs a larger subsidy to offset revenue losses, prevent interruptions to capital investments and support Amtrak's state-funded routes.
Amtrak has reduced or suspended service on many of the routes across its network, implemented pay reductions and voluntary furloughs, and suspended the 401(k) match for employees through the end of the year. The company's next steps, Amtrak said to Congress, include reducing $350 million through workforce adjustments.
Amtrak was on track for another record-setting year in the number of riders and routes before the COVID-19 crisis hit in early March, derailing projections that 2020 would yield positive earnings for the first time in the company's 50-year history. Ridership began to plummet in early March, decreasing 95% systemwide.
Amtrak had a record 32.5 million passengers in 2019, and it is projecting that it may take years to return to those pre-COVID levels, saying a substantial growth will “have to be achieved against a backdrop of stunning unemployment, socio-economic dislocation and a potential recession.” The company estimates that ridership in the next fiscal year may reach 16 million, or roughly 50% of the pre-COVID levels.