Aurizon CEO Lance Hockridge.Australia’s largest listed rail company, Aurizon, plans to shave more than $230 million in costs from its business over the next two years, in a move which will include job cuts and property sales.
The company formerly known as QR National also disclosed that it had hauled almost 194 million tonnes of coal in the year to June, which was within its latest guidance. In February, Aurizon lowered its forecasts for the amount of coal it expected to haul for the year to between 192 million tonne and 195 million tonnes.
Shares in Aurizon rose 2.5 per cent to $4.50 in early trading today.
Aurizon announced that it will strip out $100 million in so-called ‘‘support costs’’ over the next two years – up to $60 million of which will come from lowering its labour bill.
The reduction in labour costs will come from laying off an undisclosed number of workers, staff leaving of their own accord, outsourcing work and reducing the hiring of contractors.
It also plans to reduce its real estate costs by up to $25 million, part of which will be done by selling property assets it believes it no longer needs.
Aurizon is also targeting more than $130 million in ‘‘productivity improvements’’ over the next two years, including up to $70 million in labour savings.
The company has made clear that is seeking greater ‘‘labour flexibility’’ from renegotiating enterprise agreements over the next two years. All but one of Aurizon’s 19 labour agreements, which cover about 88 per cent of its workforce, will expire by the end of next year.
Aurizon has already reduced its workforce by about 1600 over the past two years through voluntary redundancy programs. A large proportion of the jobs cut have been from its coal-haulage business. The cuts include support-services roles and train drivers.
Aurizon released details of its cost-cutting measures for the next two years at a briefing to analysts in Sydney on Thursday. It will report its annual results on August 19.
The original release of this article first appeared on the website of Hangzhou Night Net.