(The following story by Christopher Dinsmore appeared on The Virginian-Pilot website on October 30.)
NORFOLK, Va. — Norfolk Southern Corp. will take a roughly $100 million charge against its fourth-quarter earnings to pay for the voluntary severance program announced in late September.
Henry C. Wolf, the railroad?s vice chairman and chief financial officer, said 563 people out of 4,300 eligible salaried employees applied for the program.
“We?re pleased and excited by the results of this program,” said David R. Goode, Norfolk Southern?s chairman, president and chief executive officer.
“This is a significant chance to reduce expenses on the non-agreement side.” Railroad employees are split between agreement, or unionized, workers and non-agreement employees, including salaried or management personnel.
Details on the size of the charge and the number of employees who will leave the company Saturday are to be released when plans are finalized, Wolf said. The railroad is reviewing applications for the severance program.
Most will be accepted, Wolf said. If that occurs, Norfolk Southern?s 28,000-person work force would be reduced by about 2 percent.
The company offered workers three weeks? pay for each year of service, a year of free health-care benefits and 90 days? outplacement assistance to leave the company.
Wolf estimated the cash cost at $65 million.
The balance will be a non-cash accounting charge to cover pension and other post-retirement benefits, he said.