Rail operator Asciano will cut back about 500 jobs in order to reduce costs by $90 million.
Rail and stevedoring operator Asciano will cut about 500 jobs across Australia in order to reduce costs by $90 million.
The company has maintained low single-digit growth over the year, however the acceleration of two new business improvement programs (BIP) has resulted in a massive headcount reduction.
The company’s original five-year BIP announced in 2011 has since been doubled to $300 million in savings by 2016.
“Material items pre tax reported in FY14 are now expected in the range of $120-130 million in costs,” Asciano said.
“The increase in the range primarily relates to the costs associated with the integration of the Pacific National rail divisions and the costs associated with the restructure of corporate and shared services.”
The company previously forecast $15 million-$25 million in material items costs.
Material items include charges of about $75 million associated with the Pacific National rolling back stock fleet, following the integration of the two rail divisions and asset write-downs associated with the Port Botany redevelopment.
The company said the majority of the cash costs in the material items would be incurred in FY14.
Asciano also said business improvement initiatives were expected to drive growth in FY15 at a higher rate than achieved in FY14, despite the expectation of relatively low volume growth across the business.
Asciano’s share price rose by 5.83 per cent to $5.53 at 2:20pm WST.