BOCA RATON — RailAmerica will cut 145 of its 2,800 employees as it struggles from the fallout of a severe drought in Australia and a soft economy in the United States, the Palm Beach Post reported.
The layoffs include six employees at the company’s Boca Raton headquarters, among them former Chief Financial Officer Bennett Marks, along with the company’s general counsel and its senior vice president of strategic planning.
Most of the layoffs are in Australia, where a lack of rain has hit the wheat harvest and cut into the freight hauled on RailAmerica’s 3,000-mile rail network in that country.
The cuts, to be completed by the end of the year, will result in an after-tax charge of $2 million for the fourth quarter. RailAmerica expects the layoffs to translate to savings of $10 million next year. RailAmerica’s headquarters staff will number about 100 after the cuts, Vice President Wayne August said.
One analyst called the move unexpected but welcome.
“It’s positive for the company, because I think they were overstaffed,” said Arthur Hatfield of Morgan Keegan & Co. in Memphis.
RailAmerica cut its corporate work force in part because it is expanding more slowly now than in recent years, when it snapped up rail lines in Australia, Chile, the Midwest and the West Coast, August said.
The company’s profit dwindled to $331,000 in the first nine months of this year from $11.6 million a year ago.
Replacing Marks as CFO is Michael J. Howe, 55, previously RailAmerica’s vice president and treasurer.
RailAmerica (NYSE: RRA, $7.27) owns 49 railroads and 12,800 miles of track in the United States, Canada, Australia and Chile.