Aurizon to save by cutting costs and jobs

Job cuts loom at Aurizon as part of plans to generate more than $230 million in ‘cost efficiencies’

Aurizon to save by cutting costs and jobs
Aurizon to cut costs and jobs

July 19, 2013

Australian rail freight company, Aurizon plans to generate more than $230 million in ‘cost efficiencies’ in the next two years, with job cuts likely.

Aurizon yesterday announced to the Australian Securities Exchange (ASX) plans to achieve a 75 percent operating ratio target by the 2015 financial year.

As part of its plans, the company aims to reduce 'support costs' by $100 million in the next two years.

Aurizon will do this in part by saving $40 to $60 million through redundancy programs, natural attrition, simplified management layers, reduced contractor spend, and outsourcing.

The company is bidding for better labour flexibility by renegotiating enterprise agreements.

Of Aurizon’s 20 enterprise agreements, 19 expire in the next 18 months.

The 19 agreements cover 88 percent of Aurizon’s workforce.

Aurizon also plans to save $15 to $25 million by rationalising its property portfolio, selling suplus assets, centralising management services, and renegotiating leases and facility costs.

The company plans to save another $10 to $15 million through information technology, by rationalising systems and business processes, upgrading reporting capability, outsourcing, and investing in new technology to drive efficiencies.

A further $130 million in 'productivity improvements' are planned, including up to $70 million in labour savings, and up to $35 million in energy savings in the next two years.

Energy consumption improvements of up to four percent a year - by having better train consist design, a smaller more productive fleet, and better driver training - are also planned.

In the year to June, the company hauled almost 194 million tonnes of coal, within the latest company guidance.

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