A Southwest Airlines Boeing 737 passenger plane taxis along the tarmac at the Ronald Reagan Washington National Airport (DCA) in Arlington, Virginia on December 13, 2024.
Daniel Slim | Afp | Getty Images
Southwest Airlines said Monday that it is cutting about 15% of corporate jobs, or about 1,750 people, a move its CEO called “unprecedented” as the company scrambles to cut costs.
The company said it expects savings from the cuts of $210 million this year and about $300 million in 2026. The layoffs will be mostly done by the end of the second quarter and include some senior leadership roles, CEO Bob Jordan said in a staff note, which was seen by CNBC.
“This decision is unprecedented in our 53-year history, and change requires that we make difficult decisions,” Jordan said in a news release. “We are at a pivotal moment as we transform Southwest Airlines into a leaner, faster, and more agile organization.”
Southwest’s decision to slash jobs comes several months after a settlement with activist investor Elliott Investment Management, which won five Southwest board seats, short of control. The firm had also pushed for Jordan to be replaced as CEO, though it was not successful.
Other recent cost-cutting measures at Southwest included a hiring freeze, a pause to the internship program and an end to team-building “rallies,” a company tradition that dated back to 1985, CNBC previously reported. It has also aggressively cut unprofitable routes.
Last year, Southwest outlined a plan to increase profits that included ditching its more than 50-year-old open seating model in favor of assigned seats and creating a section with extra legroom. It also recently launched overnight flights for the first time.
“We must ensure we fund the right work, reduce duplicative efforts, and have a lean organizational structure that drives clarity, pace, and urgency,” Jordan said in his memo on Monday.
The layoffs take effect in late April, Jordan said, adding that most affected employees will not work but will still receive salary, benefits and bonus until then.
