- Southwest Airlines is cutting 15% of its corporate workforce, or 1,750 employees, the carrier said.
- They’re the first major layoffs in Southwest’s 53-year history and come amid profitability woes.
- Read the CEO Bob Jordan’s full message on Monday to employees.
Southwest Airlines said on Monday that it is slashing 15% of its corporate workforce, or 1,750 employees.
The cuts are the first major layoffs in Southwest’s 53-year history and the airline’s latest response to the company’s financial woes as its profits plunge.
The carrier said the layoffs will help the company save about $210 million in 2025 — excluding severance packages and post-employment benefits, which could cost the company $60 to $80 million — and around $300 million in 2026.
Southwest president and CEO Bob Jordan said the severances would take effect in late April and that impacted workers would keep their pay, benefits, and bonuses until then.
Elliott Investment Management, an activist firm that took a stake in Southwest in June, has been pushing for changes at the carrier, including a restructuring of its board and updates to its business model.
Southwest said in July that it plans to end its long-standing open-seating policy to generate more seating revenue. The company also reduced flight crew positions in Atlanta last year to cut costs.
Southwest isn’t the only budget airline to take cost-cutting measures in a changing industry.
Spirit Airlines, for example, said in July it would start bundling previously a-la-carte items like snacks and checked bags to target premium passengers.
JetBlue Airways said the same month that it would delay delivering more than 40 jets to the airline’s fleet until 2030 or later.
Low-cost competitor Frontier Airlines has similarly made changes, like adding a new business-class-like cabin with a blocked middle seat to lure in more customers.
Read Southwest CEO Bob Jordan’s full message to employees on Monday:
Southwest Team: We are at a pivotal moment as we carry out our three-year business plan to transform Southwest Airlines. Our transformational plan is the largest and most comprehensive in our 53-year history, and it focuses on three simple but powerful objectives. First, boost revenues and loyalty by offering our Customers the experience they want; second, maximize efficiencies and minimize costs; and third, make the most of our investments. As we continue to work together to transform our Company, an area of intense focus will be maximizing efficiencies and minimizing costs. We must ensure we fund the right work, reduce duplicative efforts, and have a lean organizational structure that drives clarity, pace, and urgency. Improving how we work together and how we get work done has a tremendous impact on our efficiency as a Company and how we deliver against our plan. We have made the very tough decision to move forward with a reduction in our workforce, focused almost entirely on Corporate and Leadership positions. This reduction affects approximately 1,750 Employee roles, or 15% of Corporate positions. Separations do not begin until late April. Until then, most Employees who are notified of their displacement will not work but will continue to receive their salary, benefits, and bonus, if eligible. This is a very difficult and monumental shift, and I arrived at this decision after careful and thorough reflection, knowing how hard it will be to say goodbye to Cohearts who have been a significant part of our Culture and our accomplishments. We are dedicated to operating safely and reliably for our Customers every single day. The fundamental objective of Leadership and Noncontract roles is to support our Frontline Employees as efficiently and effectively as possible. With the best intentions, the growth of our Leadership and Noncontract functions have outpaced our operation’s growth for many years. Now, this group must become more lean, efficient, and agile to better serve our Frontline Employees in our shared mission of serving our Customers. What to Expect This will be hard, and we will treat our People with the care and respect they have earned and they deserve. Impacted Employees will receive severance and will be offered resources to provide an opportunity to ask questions and prepare for the future, like sessions with Human Resource Business Partners, a dedicated Offboarding Support Team, and outplacement services. Moving Forward Together This was an extremely difficult decision to make because of its impact on our People—both those who will be directly impacted and those who will remain. Changing how we work is an essential part of becoming a more agile Company, and it will be a journey. We are building a leaner organization with increased clarity regarding what is most important, quicker decision making, and a focus on getting the right things done with urgency—not unlike our entrepreneurial founding spirit of the 1970s. As we focus on delivering on our plan, our future will be built upon the actions we take today to ensure an even brighter future.
Are you one of the Southwest employees who was laid off? If so, reach out to Business Insider Senior Aviation Reporter Taylor Rains on a non-work device at trains@businessinsider.com.
