A Southwest Airlines Boeing 737 was spotted taxiing at Ronald Reagan Washington National Airport in Arlington, Virginia, on December 13, 2024.
On Monday, Southwest Airlines announced a significant reduction in its workforce. The airline plans to cut around 15% of its corporate jobs, affecting about 1,750 employees. CEO Bob Jordan described this move as “unprecedented” for the airline as it seeks to save costs.
Southwest expects to save about $210 million this year, with projected savings reaching $300 million by 2026. Most layoffs will be completed by the end of the second quarter and will include some senior leadership positions. In a note to staff, Jordan expressed the need for these changes, emphasizing that they must adapt to become a “leaner, faster, and more agile organization.”
This decision comes after a settlement with Elliott Investment Management, an activist investor that gained five seats on Southwest’s board. Although they pushed for a leadership change, it did not happen.
As part of other cost-saving measures, Southwest has implemented a hiring freeze and paused its internship program. The airline has also stopped its long-standing team-building events that began in 1985 and has cut back on unprofitable routes.
Last year, Southwest rolled out plans to increase profitability. This included changing from its traditional open seating to assigned seating and introducing a section with extra legroom. The airline also began offering overnight flights.
In his memo, Jordan highlighted the importance of focusing on essential tasks, reducing redundancy, and maintaining a streamlined organizational structure. The layoffs will officially start in late April; those affected will continue to receive their salary, benefits, and bonuses until that time.
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