Southwest Airlines to slash 15pc of corporate jobs as part of cost-saving plan, BA

Southwest Airlines has recently announced an unprecedented decision to reduce its corporate workforce by approximately 15 per cent, equating to around 1,750 positions, in a strategic move to curtail expenses and enhance organizational efficiency. This reduction encompasses 11 senior leadership roles, representing 15 per cent of the company’s senior management team. Chief Executive Officer Bob Jordan described this as a pivotal moment in the airline’s 53-year history, aiming to transform Southwest into a leaner, more agile organization.

The layoffs are projected to be largely finalized by the end of the second quarter, with anticipated savings of USD 210 million in the current year and USD 300 million by 2026. These figures exclude an expected one-time charge in the first quarter of 2025, estimated between USD 60 million and USD 80 million. This initiative is part of Southwest’s previously outlined three-year business plan, which includes strategic partnerships, vacation packages, and aircraft sale-leaseback arrangements, all designed to bolster profitability and strengthen the company’s financial standing.

This development follows the recent appointment of industry veteran Tom Doxey as the new Chief Financial Officer, succeeding Tammy Romo, who announced her retirement plans in January. Despite reporting fourth-quarter profits that exceeded Wall Street expectations—attributed to improved airfares and robust holiday travel demand—Southwest’s shares have declined by approximately 10 per cent this year. In contrast, competitors such as Delta Air Lines and United Airlines have experienced share price increases exceeding 7 per cent.

Historically, Southwest Airlines has prided itself on a strong employee-first culture, maintaining an unprecedented record of no involuntary furloughs or layoffs. Even during challenging periods, such as the aftermath of the September 11 attacks and the Great Recession, the airline managed to avoid mass layoffs and continued to report consecutive years of profitability, a streak unmatched in aviation history.

However, the current financial pressures and the influence of activist investors have prompted the company to make these significant workforce reductions, marking a notable shift in its longstanding employment practices.