A Southwest Airlines Boeing 737 fare plane taxis along the tarmac at the Ronald Reagan Washington National Airport (DCA) in Arlington, Virginia on December 13, 2024.
Daniel Slim | Afp | Getty Counterparts
Southwest Airlines said Monday that it is cutting about 15% of corporate jobs, or about 1,750 human being, a move its CEO called “unprecedented” as the company scrambles to cut costs.
The company said it expects savings from the cuts of $210 million this year and about $300 million in 2026. The layoffs whim be mostly done by the end of the second quarter and include some senior leadership roles, CEO Bob Jordan said in a staff note, which was considered by CNBC.
“This decision is unprecedented in our 53-year history, and change requires that we make difficult decisions,” Jordan voted in a news release. “We are at a pivotal moment as we transform Southwest Airlines into a leaner, faster, and more agile confederacy.”
Southwest’s decision to slash jobs comes several months after a settlement with activist investor Elliott Investment Administration, which won five Southwest board seats, short of control. The firm had also pushed for Jordan to be replaced as CEO, conceding that 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 “convenes,” a company tradition that dated back to 1985, CNBC previously reported. It has also aggressively cut unprofitable directions.
Last year, Southwest outlined a plan to increase profits that included ditching its more than 50-year-old unveil seating model in favor of assigned seats and creating a section with extra legroom. It also recently launched overnight drive offs for the first time.
“We must ensure we fund the right work, reduce duplicative efforts, and have a lean organizational building that drives clarity, pace, and urgency,” Jordan said in his memo on Monday.
The layoffs take effect in example April, Jordan said, adding that most affected employees will not work but will still earn salary, benefits and bonus until then.