Southwest Airlines Announces Layoffs
Nationwide News:
Southwest Airlines has announced its first major layoffs in its 53-year history, planning to reduce approximately 1,750 corporate positions, which constitutes about 15% of its corporate workforce.
This decision is part of a broader cost-cutting and organizational restructuring strategy aimed at enhancing efficiency and profitability.
The layoffs will primarily impact corporate overhead and leadership roles, including the elimination of 11 senior leadership positions.
Front-line employees, such as pilots and flight attendants, will not be affected by these cuts.
Southwest anticipates that this restructuring will result in savings of approximately $210 million in 2025 and about $300 million annually by 2026.
However, the company expects to incur a one-time charge of $60 to $80 million in the first quarter of 2025 related to these changes.
This move comes amid financial challenges for the airline, including a 10% decline in its share value this year, contrasting with gains by competitors such as Delta Air Lines and United Airlines.
Additionally, Southwest is facing pressure from activist investor Elliott Investment Management to improve profitability and stock performance, leading to Elliott gaining several board seats to influence company decisions.
In addition to the layoffs, Southwest has paused hiring for pilots, flight attendants, and management positions as part of its efforts to control costs and streamline operations.
