Southwest Airlines announced on Monday that it would be reducing its workforce by about 1,750 employees “to create a leaner and more agile organization as part of the airline’s transformational plan.”
Why It Matters
Southwest has been focused on increasing profits, especially since it laid out a plan last year that included removing the old open seating model for assigned seats with additional extra legroom sections.
CNBC previously reported that Denver-based Southwest is also committing to a hiring freeze, a pause in its internship program and an end to team-building activities.
The layoff decision comes months after a settlement between Southwest and investor Elliott Investment Management, which had included a push for the CEO to be replaced. The U.S. Department of Transportation (DOT) has also filed a lawsuit against Southwest Airlines, accusing the airline of illegal practices by operating chronically delayed flights.
AP Photo/David J. Phillip
What To Know
The workforce reduction will account for about 15 percent of corporate positions, including senior leadership and directors. A press release from the company stated that 11 senior leadership positions, which include vice president and jobs above it, will be eliminated as part of the restructuring.
Bob Jordan, the president and CEO of Southwest, said in a press statement obtained by Newsweek that the layoffs are “unprecedented” in the company’s history.
“This decision is unprecedented in our 53-year history, and change requires that we make difficult decisions,” Jordan said. “We are at a pivotal moment as we transform Southwest Airlines into a leaner, faster, and more agile organization.”
The workforce reduction would save Southwest approximately $210 million for the rest of 2025 and $300 million for the full year of 2026.
Employees who are being laid off will still receive severance payments and post-employment benefits. The “expected one-time charge” will be in the range of $60 to 80 million.
What People Are Saying
Bob Jordan, the president and CEO of Southwest, in a press statement obtained by Newsweek: “I arrived at this decision thoughtfully and carefully, knowing how hard it will be to say goodbye to colleagues who have been a significant part of our…
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