JACKSONVILLE, Fla. – CSX Corporation will lay off 1,000 management employees over the next few weeks, the Jacksonville-based company announced Tuesday.
The news came out on the same day the two top executives of Jacksonville's largest Fortune 500 company announced plans to retire this spring. It also comes as the railroad is in discussions with a hedge fund that wants to install the executive who led Canadian Pacific's turnaround at the Jacksonville-based railroad.
CSX said Tuesday that chairman and CEO Michael Ward and president Clarence Gooden will both retire at the end of May. Ward previously planned to work through 2019 before retiring. CSX said it has promoted chief sales and marketing officer Fredrik Eliasson to president.
The railroad said Eliasson's appointment isn't meant to pre-empt discussions with Paul Hilal's Mantle Ridge hedge fund about Hunter Harrison becoming CSX's next CEO. CSX has called for a special shareholder meeting this spring so investors can weigh in on the demands that the hedge fund is making.
"The changes are part of an orderly transition of the company's senior leadership that the board has been considering for more than a year," the company said in a news release.
A CSX spokesman would not agree to an interview Tuesday, and employees didn't want to talk, either.
CSX said its involuntary separation with 1,000 workers -- the majority of them in the Jacksonville corporate office and its subsidiaries -- will be completed in mid- to late March. The company said affected employees will receive separation benefits.
"Until an organization review is completed, we will not know the local impact," CSX spokesman Gary Sease said in a statement.
The CSX website says that 2,500 CSX management employees based in Jacksonville.
Joe Krier, or Krier Wealth Management, said there has been speculation for months that CSX could be in the midst of a takeover by that hedge fund which would install a former Canadian pacific railroad executive named Hunter Harrison as head of CSX. He says the stock market is very telling… for instance in January the stock price made an incredible jump and the financial press has been speculating the takeover may be the reason.
"It looks like they’re setting the company up for a takeover, if you’re going to lay off that much management," said Joe Krier of Krier Wealth Management. "It must mean there might be a takeover in the works because you have redundancy then if you had one company take over another. You don’t need dual accounting departments, for instance."
Krier said mass layoffs can be a result of streamlining operations or merging them with another company, but that’s little comfort to the hundreds who will lose their jobs over the next month or so.