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The Wall Street Publication > Blog > Economy > Southwest to put off 15% of company workers in cost-cutting effort
Economy

Southwest to put off 15% of company workers in cost-cutting effort

Editorial Board Published February 18, 2025
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Southwest to put off 15% of company workers in cost-cutting effort
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 Jack Otter and the panel focus on the downfall of Southwest Airways’ recognition and the way they may flip it round on ‘Barron’s Roundtable.’

Southwest Airways reduce 15% of its company workforce because it tries to quickly scale back overhead prices to change into a “leaner” firm. 

The airline mentioned that the layoffs primarily goal company overhead and management positions, together with senior management and director roles. In complete, 1,750 jobs might be affected, together with 11 senior management positions, because the provider strives to construct a “leaner and more agile organization” below its transformational plan.

“We are at a pivotal moment as we transform Southwest Airlines into a leaner, faster, and more agile organization,” CEO Bob Jordan mentioned in a press release.

SOUTHWEST TO PAUSE SOME HIRING, SUMMER INTERNSHIPS IN COST-CUTTING MEASURE

Southwest mentioned many of the separations might be accomplished by the tip of the second fiscal quarter, and can lead to roughly $210 million in financial savings for fiscal yr 2025 and $300 million for the complete 2026 fiscal yr.

The corporate expects to incur $60 million to $80 million in prices associated to severance funds and post-employment advantages within the first quarter of fiscal yr 2025. 

Vacationers use a Southwest Airways Co. self check-in kiosk at Logan Worldwide Airport (BOS) in Boston, Massachusetts, U.S., on Friday, July 19, 2019. ( Scott Eisen/Bloomberg through Getty Photos / Getty Photos)

Southwest has made substantial modifications to rein in prices, notably after activist investor Elliott Funding Administration took a $2 billion stake within the provider and subsequently known as on the airline to take actions reminiscent of making management modifications to enhance its monetary efficiency. 

Final month, the corporate introduced it was halting sure company occasions and pausing some hiring and most summer season internships, although it plans to honor affords that have been already made, as a way to restrict discretionary spending. 

Southwest Airline jet

Southwest Airways Boeing 737-700 plane touchdown at Ronald Reagan Washington Nationwide Airport. (Getty Photos / Getty Photos)

Southwest CEO Bob Jordan advised workers in a January memo that “every single dollar matters as we continue to fight to return to excellent financial performance,” The Wall Road Journal reported.

Final fall, the provider mentioned it will be “minimizing hiring, optimizing scheduling efficiency, capitalizing on supply chain opportunities, and improving corporate efficiency” whereas implementing a “multi-year” plan to enhance its funds. Southwest is aiming to realize a $500 million run charge in financial savings in 2027, the corporate mentioned at its investor day in September. 

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Ticker Safety Final Change Change % LUV SOUTHWEST AIRLINES CO. 30.28 +0.35
+1.17%

In the course of the investor day, Southwest additionally detailed massive modifications it has within the pipeline, reminiscent of providing assigned seats, evolving its boarding course of and introducing premium seating. It is going to additionally begin working red-eye flights in February to “maximize aircraft utilization” and shorten the turnaround time for planes between flights.

FOX Enterprise’ Aislinn Murphy contributed to this report. 

TAGGED:corporatecostcuttingEffortlaySouthweststaff
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