Southwest Airlines announced on Monday that it will lay off 1,750 employees, or 15% of its corporate and leadership positions — marking the company’s first major layoffs in its 53-year history.
The layoffs, set to begin in April, will affect 11 senior leadership roles, including vice presidents and higher-level executives, according to an official statement from the Dallas-based airline.
Southwest anticipates these job cuts will save $210 million in 2025 and $300 million in 2026. However, the company will also incur a one-time expense of $60 million to $80 million for severance and other related costs.
Southwest CEO Addresses Tough Decisions Amid Transformation
“As we continue to work together to transform our Company, an area of intense focus will be maximizing efficiencies and minimizing costs,” Southwest CEO Bob Jordan said in the statement. He described the layoffs as “a very difficult and monumental shift,” adding that the airline is going through an important transformation to become more “lean, efficient, and agile.”
“This decision is unprecedented in our 53-year history, and change requires that we make difficult decisions,” Jordan further said.
According to the statement, until the job cuts begin, “most employees who are notified of their displacement will not work but will continue to receive their salary, benefits, and bonus, if eligible.”
Leadership Changes And Investor Pressure
Activist investors pointed out last year that the airline’s stock price had dropped by more than 50% since early 2021. Although Southwest exceeded analysts’ expectations in its latest earnings report in January, the boost was mainly due to higher ticket prices.
Adding to its challenges, Southwest has been under pressure from Elliott Investment Management, which has pushed the airline to increase profits and raise its stock price. The hedge fund invested $1.9 billion in the airline in June last year and later called for leadership and operational changes.
Earlier this year, Southwest appointed a new chief financial officer, Tom Doxey, who was previously the president of Breeze Airways. Meanwhile, Southwest’s former chief financial officer, Tammy Romo, and chief administration officer, Linda Rutherford, are set to retire in April 2025.
Elliott Investment also played a role in influencing policy changes at Southwest, including the switch from open seating to assigned seating, which allows the airline to charge higher prices for premium seats.
Southwest’s Holiday Travel Crisis
Southwest Airlines faced financial losses after a major operational failure led to 16,700 flight cancellations during the busy holiday travel period in late December. Employees blamed outdated staff scheduling software, which made it difficult for the airline to recover from weather-related disruptions.
In 2021, the company said that it had never laid off employees. Former CEO Gary Kelly had previously emphasized that taking care of employees was a priority, which in turn helped maintain good customer service.
Southwest Airlines serves 117 airports across 11 countries. With over 72,000 employees, it served over 140 million customers in 2024.
The post Southwest Airlines To Cut 1,750 Jobs In First-Ever Mass Layoffs In 53 Years appeared first on International Business Times.
