Shares in Calgary-based Canadian Pacific hit a new 52-week high today, in the first trading after the railway announced it would cut 4,500 positions — a 23-per-cent reduction in the railway's 19,500-member workforce — by 2016.

The stock hit $98.04 before falling back to close at $96.82, a gain of $3.82, or 4.11 per cent, Wednesday in Toronto.

Volume was two million shares, four times the three-month average. Investors bid up the shares of companies they expect will be more profitable because of lower costs.

Much of the reduction is expected to come through attrition as older workers retire and aren't replaced.

Canadian Pacific said Tuesday it expected to eliminate 1,700 positions by the end of the year.

Doug Finnson, vice-president of the Teamsters Canada Rail Conference, said the announcement caught him off guard.

He said it would appear the 1,700 layoffs would have to come over the next four weeks.

Firm aims to increase revenue by up to 7%

“I'm wondering how they're going to accomplish that other than to hand out 1,700 layoff notices for Christmas,” Finnson said.

But Canadian Pacific spokesman Ed Greenberg told CBC News the number represented jobs eliminated over the entire year of 2012.

The cuts are part of a plan to increase annual revenue growth between four and seven per cent from 2012 levels as well as reduce its full-year operating ratio — a closely watched measure of how much revenue is required to run the business — to the mid-60s range by 2016.

The strategic moves are the latest for the railway since a new board of directors installed CEO Hunter Harrison in the summer following a bitter proxy fight with the company's largest shareholder.

Canadian Pacific management has yet to meet with the Teamsters Canada Rail Conference, which represents conductors, yardmen, locomotive engineers and railway traffic controllers, the union said in a release Wednesday.

In May, that group of Teamsters workers, known as running trades, walked off the job for nine days before Ottawa forced them back to work.

The stoppage took place just days after shareholders voted to oust then-CEO Fred Green after a bitter proxy contest launched by the railway's biggest shareholder, Pershing Square Capital Management.

CP to increase train lengths, speeds

But it was about a month before Harrison, Pershing Square's pick for Green's replacement, was formally appointed CEO.

"We have good relationships with most of our organizations. I can tell you that the Teamsters, from a running trades standpoint, is not my favourite group right now," Harrison said as he discussed his plans for CP with investors in New York on Wednesday.

"I wasn't here then, but right before my arrival, as far as I'm concerned, they kicked this company when it was down."

Harrison is an American-born former CEO of Canadian National Railway and is credited with turning the Montreal-based company into the most efficient major railway in North America.

The railway company also said it plans to increase train lengths and speeds, in order to move the same or increased volumes with fewer trains.

It may also sell some of its real estate holdings and plans to move its corporate headquarters, now in downtown Calgary, to its Ogden Yard in the city’s southeast by 2014.

With files from The Canadian Press