An airplane taxis of Southwest Airlines Boeing 737 passengers along the Tarmac at Ronald Reagan Washington National Airport (DCA) in Arlington, Virginia, December 13, 2024.
Daniel Slim | AFP | Getty images
Southwest Airlines said on Monday that it reduced approximately 15% of corporate jobs, or about 1,750 people, a move from its CEO called “unprecedented” while the company rushes to reduce costs.
The company said it expects discount savings of $ 210 million this year and around $ 300 million in 2026. Layout will mainly be carried out by the end of the second quarter and will include positions Management, said CEO Bob Jordan in a staff note, which was seen by CNBC.
“This decision is unprecedented in our 53 years of history, and the change requires that we make difficult decisions,” Jordan said in a press release. “We are at a pivotal moment when we transform Southwest Airlines into a leaner, faster and more agile organization.”
Southwest’s decision to reduce jobs occurs several months after a settlement with the activist investor Elliott Investment Management, which won five seats in the Southwest Board, unless you control. The company also had pressure for Jordan to be replaced as CEO, although it did not succeed.
Other recent measures to reduce costs in the Southwest included a job freeze, a break from the internship program and the end of the “gatherings” of a team consolidation, a business tradition which dates back to 1985, previously reported CNBC. He also aggressively reduced non -profitable routes.
Last year, the Southwest described a plan to increase the benefits which included the abandonment of its model of open seats over 50 years in favor of the assigned seats and the creation of a section with a space of Additional leg. He also recently launched night flights for the first time.
“We have to make sure to finance the right job, reduce duplication efforts and have a lean organizational structure that stimulates clarity, pace and urgency,” said Jordan in his memo on Monday.
The layoffs come into force at the end of April, said Jordan, adding that most of the affected employees will not work but will still receive wages, benefits and bonuses until then.