Wow: Southwest Airlines Plans Layoffs, First In Company’s History

We’ve had reason to believe that Southwest Airlines would shortly be making a big announcement, and we now have the details of what it is.

Southwest Airlines plans corporate & leadership layoffs

Southwest Airlines CEO Bob Jordan has just announced internally that the company will be laying off many employees, including those working in corporate and leadership positions.

The expectation is that the company will be laying off around 1,750 people, representing around 15% of employees in corporate positions. The company expects savings from the cuts of $210 million for this year, and $300 million in 2026. Here’s the full memo from Jordan:

We are at a pivotal moment as we carry out our three-year business plan to transform Southwest Airlines.

As we continue to transform our Company, we must ensure we fund the right work, reduce duplicative efforts, and have a lean organizational structure that drives clarity, pace, and urgency.

We must improve how we work together, maximizing efficiencies and reducing costs. To achieve this goal, we have made the difficult decision to reduce our workforce, almost entirely in Corporate and Leadership positions. At 4 p.m. today, I will send a message to all Employees sharing this news and outlining next steps.

This is a challenging shift that will be difficult for all of us, and we are focused on treating our People with care and respect throughout this process. Beginning at 6 p.m. today, the main Headquarters building (HDK) will be closed, and Noncontract Employees who work at the Headquarters Campus and aren’t required to be on campus for operational or training purposes will be instructed to work remotely. TOPS and Wings will remain open for functions neccessary to business continuity, like the NOC and required training.

Tomorrow morning, Noncontract Employees will receive appointments for virtual meetings in which they will be given more information about their employment status. Most Employees impacted will no longer work for the Company but will remain employed by Southwest until late April. During this time, impacted Employees will continue to receive salary, benefits, and a bonus (if eligible), as well as resources to help answer questions and prepare for the future.

I know this will be hard, but we will get through it together.

@xJonNYC predicted a major announcement, and indeed, it has turned out to be true. Many of us hoped that the announcement might have some sort of a positive angle to it, but obviously people losing their jobs is terrible, and not what anyone would hope for.

This Southwest Airlines memo is absolutely brutal

Layoffs in general are sad, but I think it can’t be overstated just how wild this whole situation is for a company like Southwest. Historically, Southwest has been all about its corporate culture, and has prided itself in never having layoffs in its 53 year history, even during the worst of times.

What’s kind of wild to me about this memo isn’t just the layoffs as such, but also the tone here — the company is essentially locking employees out of headquarters, and frankly, the entire memo comes across as kind of callous. Like, “we will get through it together.” You mean, expect for the people who are losing their jobs?

Southwest is of course dealing with Elliott Investment Management, the activist investors who want the company’s profitability to improve considerably, and they’ve been pushing for major changes.

I think it goes without saying that this change was pushed by Elliott, though I think the firm is probably underestimating the extent to which the company’s corporate culture is being destroyed here. I have to imagine that Herb Kelleher would roll over in his grave seeing what’s going on at the airline right now.

Bottom line

Southwest Airlines has revealed plans for significant layoffs, which will be the first in the company’s history. The expectation is that 1,750 management jobs will be cut, representing roughly 15% of that workforce. This is a major departure from what Southwest has stood for over the past 50+ years. My thoughts are with those losing their jobs.

What do you make of the Southwest layoffs?