UPDATE 3-CP Rail to slash 4,500 jobs in efficiency drive

Tue Dec 4, 2012 7:45pm EST
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* Company to cut 1,700 jobs by year end, 4,500 by 2016

* Job cuts deeper than CP Railway estimated earlier

* New CEO Harrison unveils formal turnaround plan in speech

* Railway to explore options on two U.S. rail lines

* Harrison confirms plans to relocate Calgary headquarters

By Allison Martell and Susan Taylor

Dec 4 (Reuters) - Canadian Pacific Railway Ltd, the country's second biggest rail carrier, said on Tuesday it would cut 4,500 jobs by 2016 as part of a drive by its new CEO to slash costs and improve its operating efficiency, now the industry's worst.

The job reductions, announced by Chief Executive Hunter Harrison during a speech in New York, were deeper than expected. The company, which has 19,500 employees and contractors, had earlier estimated that it would cut 5 to 10 percent of its workforce, or about 1,950 at the most.

In his speech, Harrison said he pushed hard to cut costs in the five months since he was installed as chief executive after a proxy battle led by William Ackman's Pershing Square Capital Management Ltd, the U.S. hedge fund that is CP Railway's largest shareholder.   Continued...