The railway said Tuesday the jobs would include both employee and contractor positions.
CP said it expected to eliminate 1,700 positions by the end of the year.
The firm said the cuts would include job reductions, natural attrition and using fewer contractors.
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.
Firm will move Calgary headquarters
CEO Hunter Harrison said the aim was to “greatly improve service, increase the railway's efficiency, lower costs and grow the business.”
The strategic moves are the latest for the railway since a new board of directors installed Harrison in the summer following a bitter proxy fight with the company's largest shareholder.
Pershing Square Capital pushed for Harrison to replace then-CEO Fred Green, saying the veteran railroader had what it takes to bring CP from 2011's operating ratio of 81.3 to 65 by 2015.
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.
CP 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.
The company has already made changes to decrease transit times for customers and has closed certain switching operations at yards in Toronto, Winnipeg, Calgary and Chicago.
"We have initiated a rapid change agenda and have made tremendous progress in my first 160 days, and we are only getting started," Harrison said.
In the weeks following Harrison's arrival, a number of executives left and were replaced with Harrison supporters.
"We now have a leadership team that understands the urgency of making change and improving the culture of this organization," Harrison said.
"CP has many talented railroaders who want to win. Together we are squarely focused on improved service and becoming the low-cost carrier. This will allow us to continue to grow with our customers."
Earlier in the day, the railway said it was seeking potential buyers for a line that stretches about 1,000 kilometres across several states in the U.S. Midwest.
Canadian Pacific announced from Minneapolis on Tuesday morning that it's exploring strategic options for a line that runs from Tracy in Minnesota west into South Dakota, Nebraska and Wyoming.
CP assumed operational control of the line when it acquired Dakota, Minnesota & Eastern railroad in 2008.
It's the second move this week that shows the diminished status of the U.S. acquisition, including CP's announcement Monday that it has deferred plans to extend one of its lines into a coal-producing area known as Powder River Basin.