MONTREAL, Que. — Canadian National Railway (CN) says it is in the process of eliminating some 690 jobs — including about 245 at its Montreal corporate headquarters — to increase productivity.

Company president Paul Tellier says the cutbacks impact about three per cent of CN’s work force, and of those, nearly half of the out-going workers are already gone.

By the time the cuts are finished next year, the rail giant will still employ about 22,000 workers.

“The job reductions, the majority of which are non-union, result from the streamlining of administrative functions, more efficient management of scheduled freight operations and other productivity improvements across the network,” says Tellier. “I realize CN’s work-force adjustment program may concern employees, however, our company operates in a highly competitive environment and it must strive continually to improve productivity for the benefit of our customers and shareholders.”

While Montreal is the hardest hit, Edmonton will lose 115 jobs, Winnipeg will lose 72 and the rest are scattered in other centres, or as Tellier describes the cuts, “a few jobs here and there.”

The railway will take a $62-million after-tax charge in the second quarter to cover the costs of severance packages and other expenses related to the job reductions. It’s also taking a $71-million after-tax charge to write off its investment in troubled telecommunications company 360networks Inc. However, CN is also recording $110 million in deferred income tax recovery as a result of Canada’s lowered corporate-tax rates.