Southwest Airlines revealed plans on Monday to eliminate approximately 1,750 corporate positions, marking the first significant layoffs in the carrier’s 53-year history. The reduction represents roughly 15% of the airline’s corporate workforce and will primarily affect corporate and senior leadership roles, with implementation scheduled to begin in late April.
Southwest CEO Bob Jordan emphasized the company’s focus on organizational transformation in a strategic move to enhance operational efficiency. The initiative aims to streamline operations, reduce redundancies, and create a more agile corporate structure.
The airline projects cost savings exceeding $500 million over the next two years through these organizational changes.
The decision follows strategic pressure from Elliott Investment Management, which maintains an 11% ownership stake in Southwest. The hedge fund had previously urged the airline to improve its financial performance in June 2023. This workforce reduction announcement also comes after Southwest’s November 2023 initiative offering voluntary buyouts and extended leaves to operations personnel at 18 airports, addressing staffing imbalances amid Boeing aircraft delivery delays.
Southwest will provide severance packages and access to transition resources to support affected employees. The company has emphasized its commitment to assisting staff members through this organizational change.
The market has responded cautiously to these developments, with Southwest’s stock performance showing continued pressure. The airline’s shares have declined approximately 9% since the beginning of 2024, with additional modest decreases observed during Tuesday’s morning trading session.
