Southwest Airlines Layoffs: Major Cost-Cutting News

Southwest Airlines Announces Major Layoffs Amid Cost-Cutting Efforts

In a move that marks a significant shift in its corporate strategy, Southwest Airlines has announced it will lay off 15% of its corporate workforce, including senior leadership roles. This decision, which affects approximately 1,750 employees, is aimed at reducing overhead costs and transforming the airline into a leaner, more agile organization.

The layoffs will primarily target corporate overhead and leadership positions, with 11 senior leadership roles being eliminated. CEO Bob Jordan stated, "We are at a pivotal moment as we transform Southwest Airlines into a leaner, faster, and more agile organization". The company expects the layoffs to result in approximately $210 million in savings for fiscal year 2025 and $300 million for fiscal year 2026.

This decision comes after pressure from activist investor Elliott Investment Management, which took a $2 billion stake in Southwest and called for leadership changes to improve the airline's financial performance. Southwest has also paused certain corporate events, hiring, and most summer internships to limit discretionary spending.

Despite the layoffs, Southwest plans to continue its transformation initiatives, including offering assigned seats, evolving its boarding process, and introducing premium seating. The airline also aims to achieve a $500 million run rate in savings by 20272.

While the layoffs are a difficult and monumental shift, Jordan emphasized the importance of every dollar in returning to excellent financial performance. The company is committed to taking great care of its employees and customers as it navigates this challenging period.