Southwest Airlines to Cut 1,750 Corporate Jobs: What This Means for Travelers and the Future of the Airline

Southwest Airlines, based in Dallas, recently announced it will lay off about 1,750 employees, which is roughly 15% of its corporate staff. This decision affects a workforce of over 72,000 individuals, marking a significant shift for the airline.

CEO Bob Jordan expressed that this was a tough decision, emphasizing the important role these employees played in the company’s culture and success. The layoffs come after the airline saw rising labor costs and issued a warning during its fourth-quarter earnings call. Despite pausing hiring for management and other roles, Southwest also offered buyouts to staff at 18 airports prior to this announcement.

Southwest is going through a major transformation, which Jordan calls “the largest and most comprehensive” in its history. They have introduced assigned seating, and sold or leased back some of their aircraft to improve profitability. Over the years, the airline maintained a reputation for never laying off employees, which made it a favorite among both workers and travelers.

However, increasing pressure from Wall Street, particularly from activist investor Elliott Management, has prompted these changes. After a tense relationship, Southwest agreed to appoint five board members suggested by Elliott to address concerns about management and financial performance. In response to this pressure, the airline has made adjustments to some of its core policies, including moving to assigned seating and adding redeye flights.

Jordan noted that the growth of their leadership and non-contract roles had outpaced operational growth. To better serve their frontline employees and customers, a more streamlined approach is now necessary.

The layoffs are set to begin in April. Affected employees will continue to receive their salary and benefits until then, although they will not be working during this period.

Check out this related article: Southwest Airlines Unveils Bold Strategy: Cutting 15% of Corporate Jobs to Streamline Costs