In one regulatory Monday, Southwest Airlines notified Her first round of mass holidays in his 53-year-old history as the airline aims to reduce costs.
The cuts affect 1,750 corporate employees or 15% of the corporate workforce nearly 12,000 southwest people. The southwest will also eliminate eleven high leadership positions at the level of the Vice President and above, the 15% equivalent of his senior management committee.
“This decision is unparalleled in our 53-year history and the change wants to make difficult decisions,” Southwest CEO Bob Jordan said In a press release. “We are at an important moment as we turn the Southwest Airlines into a weaker, faster and more versatile organization.”
Southwest estimates that dismissals will result in $ 210 million in cost savings in 2025 and $ 300 million in 2026. The airline will begin to drop employees in April and complete the holidays by the end of the second quarter of 2025, or at the end of June. The cuts will not affect the front -line workers like pilots and flight attendees.
In one Note to employees on Monday Received by ABC News, Jordan wrote that cuts would be “a very difficult and monumental change”, but would help the airline work to minimize costs.
The southwest avoided massive vacations during economic recipes, September 11, 2001, terrorist attacks and pandemia, but has recently been pressured to reduce costs by activist investors and increased labor costs. Airline The most recent profit report For the fourth quarter of 2024 it shows that its cost per kilometer (CASM), or the cost for an airline to fly a single country, increased by 11.1% year by year. The southwest blamed partly increased “raised pressure cost”.
Southwest also engaged in a four-month war with a $ 69 billion Defense Fund and Investor Activist Elliott Investment Management. ISSUE resulted in a ceasefire In October, during which the southwest appointed five board directors that Elliott appointed (out of a total of 13) board members. Elliott now not only has important representation on the southwest board, but now it's one of the airline larger investors, with a portion of over 10%, or nearly $ 2 billion.
Southwest is now implementing some of the changes Elliott suggested last year, such as arranging his open upholstery plan with Places and the option to buy points with extra. However, those changes may take many years to complete.
Despite various pressures, Southwest reported Record income of $ 27.4 billion in 2024.