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- Southwest to lay off 15% of corporate staff in cost-cutting effort (foxbusiness.com)
Southwest Airlines is slashing 1,750 corporate jobs, roughly 15% of its corporate workforce. The airline says the cuts primarily affect overhead and leadership positions, including senior leadership and director roles.
CEO Bob Jordan stated the goal is to create a “leaner and more agile organization.” This restructuring is part of a larger transformational plan for the company.
The airline expects the job cuts to be mostly complete by the end of the second fiscal quarter. These cuts are projected to save around $210 million in fiscal year 2025 and $300 million in fiscal year 2026. However, the company anticipates severance and related costs between $60 million and $80 million in the first quarter of fiscal year 2025.
These cost-cutting measures follow pressure from activist investor Elliott Investment Management, which acquired a substantial stake in Southwest and urged leadership changes to improve financial performance.
Last month, Southwest paused some hiring and most summer internships, along with halting certain corporate events to limit spending. Earlier this year, CEO Jordan emphasized the importance of cost control to employees.
Last fall, the airline announced a multi-year financial improvement plan. This includes minimizing hiring, improving scheduling and supply chain efficiency, and enhancing corporate efficiency. Southwest aims to achieve $500 million in run rate savings by 2027.
As part of its transformation, Southwest is also planning operational changes. These include assigned seating, adjustments to the boarding process, premium seating, and the addition of red-eye flights to maximize aircraft use.
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- Southwest to lay off 15% of corporate staff in cost-cutting effort (foxbusiness.com)