A Southwest Airlines Boeing 737 passenger plane taxis along the tarmac on the Ronald Reagan Washington National Airport (DCA) in Arlington, Virginia on December 13, 2024.
Daniel Slim | Afp | Getty Images
Southwest Airlines said Monday that it’s cutting about 15% of corporate jobs, or about 1,750 people, a move its CEO called “unprecedented” as the corporate scrambles to chop costs.
The corporate said it expects savings from the cuts of $210 million this yr and about $300 million in 2026. The layoffs might be mostly done by the tip of the second quarter and include some senior leadership roles, CEO Bob Jordan said in a staff note, which was seen by CNBC.
“This decision is unprecedented in our 53-year history, and alter requires that we make difficult decisions,” Jordan said in a news release. “We’re at a pivotal moment as we transform Southwest Airlines right into a leaner, faster, and more agile organization.”
Southwest’s decision to slash jobs comes several months after a settlement with activist investor Elliott Investment Management, which won five Southwest board seats, in need of control. The firm had also pushed for Jordan to get replaced as CEO, though it was not successful.
Other recent cost-cutting measures at Southwest included a hiring freeze, a pause to the internship program and an end to team-building “rallies,” an organization tradition that dated back to 1985, CNBC previously reported. It has also aggressively cut unprofitable routes.
Last yr, Southwest outlined a plan to extend profits that included ditching its greater than 50-year-old open seating model in favor of assigned seats and creating a piece with extra legroom. It also recently launched overnight flights for the primary time.
“We must ensure we fund the best work, reduce duplicative efforts, and have a lean organizational structure that drives clarity, pace, and urgency,” Jordan said in his memo on Monday.
The layoffs take effect in late April, Jordan said, adding that the majority affected employees is not going to work but will still receive salary, advantages and bonus until then.
