Class I American railway CSX has laid off 166 management employees, about five per cent of its non-union workforce, and furloughed 193 conductors in a cost-cutting move, reports New York's FreightWaves.

The railway also placed 157 conductors in unassigned status, trimmed extra boards and reduced travel. Chief executive Steve Angel told employees the cuts were necessary to streamline operations amid challenging economic conditions. He said affected staff would receive severance packages and transition support.

Mr Angel became CEO in September after activist investor Ancora Holdings pushed out Joe Hinrichs, citing poor shareholder returns and operational performance. Ancora had criticised CSX for failing to pursue a merger while rivals Union Pacific and Norfolk Southern were reportedly in talks.

CSX's fourth-quarter freight traffic rose 1.3 per cent, but merchandise traffic fell 2.1 per cent while intermodal volume grew 5.2 per cent. Chief financial officer Kevin Boone said earnings would take a US$40 million hit from reduced coal shipments after an October derailment and weaker auto shipments tied to an aluminium shortage.

The company had already reported an eight per cent decline in operating income in the third quarter, underscoring the financial pressures behind the latest restructuring.