AMTK: Needs For Drastic Measures Outlined By CEO

Amtrak CEO Flynn Identifies $1.475 Billion in FY2121 Rescue Funding Requirements, and Informs Employees that 20% of Headcount is Critical to Cutting Expenses.

26.May, Washington DC — Amtrak President and CEO Bill Flynn submitted a letter to Congress outlining the passenger network’s FY 2021 need for an additional $1.475 billion in supplemental funding. At the same time, Flynn addressed Amtrak employees via an internal memo outlining a 20% workforce reduction by October.2020.

Amtrak projects revenue to fall by $1.6 billion and to run a $1.4 billion loss after it nearly broke even last year. With strong ridership and revenue levels in the first quarter of FY 2020, Amtrak was on track for another record-breaking year. However, Amtrak, like all other modes, has seen a dramatic decline in demand for service since the pandemic, with ridership down by 95%, and expected to return only to approximately 50% in FY 2021.

Letter to Congress

In the Congressional letter, Flynn stressed that the additional funding is necessary for Amtrak to continue to operate at minimum service levels across the passenger rail network, and continue capital investments for the future. The funds would also support Amtrak’s 17 state partners on the National Network and nine commuter and state partners on the Northeast Corridor {Flynn letter to Congress, 25.May.2020}.

The $1.475 billion request, for the fiscal year that begins 01.Oct.2020, is in addition to an annual $2 billion in support it has been receiving from Congress in recent years, and the $1 billion it granted in April under the CARES Act.

An Amtrak media release indicated that the company is taking significant steps to reduce its operating costs by approximately $500 million, of which $350 million will derive from a 20% reduction in headcount {Amtrak press release, 05.May.2020}.

Memo to Employees

In the employee memo, Flynn said that the company would reduce the workforce by up to 20% (approximately 3,600 from the ~18,000 current headcount — Ed.) by 01.October. He said the cuts were “an essential adjustment we must make … 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.”

Flynn wrote that, “Our first step will be to offer incentives for voluntary separations and retirements before we resort to involuntary separations.” Ensuing measures may include unpaid time off, extended salary and benefit cuts, furloughs and layoffs. Those options would apply to both labor and management positions across the company {Flynn letter to Congress}.