Southwest Airlines has announced plans to lay off 1,750 corporate employees, cutting 15% of its non-union workforce as part of a broader effort to reduce costs and improve efficiency. The Dallas-based airline revealed the decision in a statement on Monday, citing financial struggles and the need for a leaner operational structure.
Eligible employees will continue to receive salary and benefits until April, along with severance pay and job placement assistance. Southwest CEO Robert Jordan described the layoffs as an “extremely difficult decision,” emphasizing the company’s goal to streamline leadership roles and better support frontline employees.
“With the best intentions, the growth of our Leadership and Noncontract functions have outpaced our operation’s growth for many years,” Jordan explained in the company’s statement. “Now, this group must become more lean, efficient, and agile to better serve our Frontline Employees in our shared mission of serving our Customers.”
Financial and Legal Challenges
Southwest has been facing increasing financial and legal pressures in recent months. The airline reported weaker-than-expected earnings in its third quarter of 2024, prompting concern among investors. In June, Jordan assured stakeholders that his leadership team had a plan to improve financial performance, but cost-cutting measures, including layoffs, have now become necessary.
Adding to the airline’s troubles, the U.S. Department of Transportation recently sued Southwest for allegedly operating chronically delayed flights without adjusting its schedules. An investigation found that, between April and July 2022, a Southwest flight between Chicago Midway and Oakland was delayed between 59% and 76% of the time. The lawsuit argues that Southwest violated passenger rights by not providing accurate scheduling information.
U.S. Transportation Secretary Pete Buttigieg commented on the issue, stating:
“Airlines have a legal obligation to ensure that their flight schedules provide travelers with realistic departure and arrival times.”
Southwest responded to the lawsuit, expressing disappointment over the government’s decision to pursue legal action overflights that took place more than two years ago.
Restructuring and Future Plans
The layoffs are part of a larger restructuring effort within Southwest Airlines. In October, the company made changes to its board as part of a settlement with investment management firm Elliott, which had pressured Jordan to resign. Since then, the airline has introduced new revenue-generating initiatives, including assigned seating, in hopes of improving its financial outlook.
Despite the turbulence, Southwest remains committed to moving forward with a more agile structure. “We are building a leaner organization with increased clarity regarding what is most important, quicker decision-making, and a focus on getting the right things done with urgency,” Jordan stated.
As the airline navigates these changes, all eyes will be on Southwest’s ability to stabilize its financial health and maintain its reputation as a leading low-cost carrier.
