Southwest Airlines announced on Monday plans to reduce 1,750 jobs, the first wide fired in the 53-year history of the airline.
The company said that the cutbacks would mainly concentrate on business positions, whereby approximately 15 percent of that labor force would be taken into account. The dismissals include 11 senior leaders with titles of vice president or higher, the airline said. Most cuts will be carried out at the end of June.
In a statement, the Chief Executive of Southwest, Bob Jordan, mentioned the decision 'unprecedented'.
“We are at a crucial moment when we transform Southwest Airlines into a slimmer, faster and more agile organization,” he said. “I carefully came up with this decision, knowing how difficult it will be to say goodbye to colleagues who have been an important part of our southwestern culture and performance.”
Mr. Jordan's own job was threatened last year after the Elliott management Hedgefonds had collected an interest of about 10 percent in the airline and began to insist on widespread change, including the expulsion of Mr Jordan. Elliott had accused Mr Jordan and the board of the airline of complacency and not control the costs, so that the profit margins were eroded that were once jealous of industry.
In response, Mr. Jordan has drawn up a three-year plan to make radical changes, including dropping the seat self-policy of the airline in favor of assigned seats, adding seats with extra legroom and introduction of red eyes-de First started last as the last week – to make more use of his planes.
Southwest also agreed to add board members that were recommended by the investment firm, and Elliott eventually dropped his question of Mr Jordan's departure.
The Job cuts announced on Monday saves this calendar year and $ 300 million next year, the airline said. But those figures do not include one -off costs of $ 60 million to $ 80 million to pay dismissal and other benefits for dismissed employees.
Southwest had an unparalleled 47-year series of annual profit until 2020, when the money lost together with the rest of the industry during the COVID pandemie. Since then it has reported profit every year and the only one of the four largest US airlines that has never applied for bankruptcy protection remains, although the costs of some of his colleagues have been surpassed.
Nevertheless, the airline, which only offers limited international flights, is a colossus: Southwest is wearing more passengers and operates more flights in the United States than any other carrier. The airline is also loved by pilots, who have given its Economy class the highest customer satisfaction scores of each carrier, according to JD Power, a market research agency.
