DALLAS- Southwest Airlines (WN) has initiated its first-ever mass layoff, announcing plans to eliminate 15% of its corporate workforce, affecting 1,750 employees starting April 2025.
The restructuring extends to senior leadership, with eleven executive positions above the vice president level facing elimination.
Southwest to Lay off 15% Corporate Employees
The airline anticipates significant financial benefits from this workforce reduction, projecting cost savings of $210 million in 2025 and $300 million in 2026. The company expects to incur one-time charges between $60 million and $80 million for severance packages and related expenses.
CEO Bob Jordan addressed employees through an internal communication, characterizing the decision as a “monumental shift” in the company’s approach to operational efficiency and cost management.
This move marks a departure from Southwest’s long-standing tradition of maintaining job security, having previously prided itself on avoiding layoffs throughout its history until 2021.
Southwest’s restructuring emphasizes streamlining leadership and non-contract functions, addressing years of administrative growth that has outpaced operational expansion. The initiative aims to create a more agile organizational structure to support frontline operations effectively.
The airline has developed a comprehensive support system for displaced employees, including severance packages, dedicated human resource consultations, an offboarding support team, and professional outplacement services. This approach reflects Southwest’s commitment to maintaining respectful employee relations during the transition.
The reorganization focuses on three primary objectives: enhancing customer experience to boost revenue and loyalty, optimizing operational efficiency while reducing costs, and maximizing return on investments. These changes aim to restore the company’s entrepreneurial spirit reminiscent of its 1970s founding era.
Southwest’s leadership emphasizes that this restructuring represents a fundamental shift toward faster decision-making processes and clearer organizational priorities. The company maintains its commitment to safety and reliability while implementing these structural changes to ensure long-term sustainability and growth.
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Under Pressure Since COVID
The airline faces mounting pressures following recent challenges. Its stock performance declined more than 50% from early 2021 levels, though recent earnings reports showed improvement, primarily driven by increased airfare prices. Elliott Investment Management’s $1.9 billion stake acquisition in June 2024 catalyzed significant operational changes.
Leadership transitions accompany these structural changes. Tom Doxey, former president of Breeze Airways, assumed the role of chief financial officer at the start of 2025. Current CFO Tammy Romo and Chief Administration Officer Linda Rutherford will conclude their tenures in April 2025.
Operational modifications extend beyond personnel changes. The airline reversed its signature open seating policy in favor of assigned seating, a strategic shift aimed at generating additional revenue through premium seat sales. This change followed pressure from Elliott Investment Management.
The restructuring follows a challenging period for Southwest, marked by a December operational crisis that resulted in 16,700 flight cancellations during peak holiday travel. Employees attributed these disruptions to outdated scheduling systems that hampered recovery efforts during adverse weather conditions.
Since its founding in 1971, Southwest Airlines has established itself as a leading carrier, serving 117 airports across 11 countries. The airline continues to maintain its position as the largest provider of nonstop domestic flights within the United States, according to U.S. Department of Transportation data.
With over 72,000 full-time equivalent employees, Southwest transported more than 140 million passengers in 2024. The airline’s business model centers on combining affordable fares with high-quality customer service, a strategy that has garnered industry recognition and customer loyalty.
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