Southwest Airlines Is Offering Buyouts in 18 Markets. Here’s What To Know

Southwest Airlines has revealed its intent to offer buyouts to workers in 18 different markets throughout the United States. These buyouts will bring the total number of employees at the discount airline to levels lower than in 2023. Let’s take a look at what we know about this latest announcement so far.

Southwest Airlines Buyout Details

According to The Orange County Register, as the airline reduces its flight schedule due to aircraft delivery delays, Southwest Airlines Co. will provide voluntary departure packages or extended leaves to airport employees in 18 cities, including Atlanta and Los Angeles.

According to a statement released by the discount airline on Monday, Nov. 18, the offers will be extended to airport ground staff, including customer service, ramp, and operations agents, as well as cargo employees and supervisors in certain situations. The buyout option will also be offered to Southwest headquarters staff who assist airport employees.

The exact number of people who will receive the offers, which will be sent this week, was not immediately disclosed by Southwest Airlines. At the end of the year, those who accept will depart from the airline. The airline has previously stated that it would have 2,000 fewer employees at the end of this year than it had at the end of 2023.

“Southwest has reduced overall capacity to meet demand with a constrained fleet due to aircraft delivery delays,” the airline said in a statement to The Orange County Register via email. “Offering voluntary separation and extended time off to contract and noncontract employees, along with continued slowed hiring, will help us avert overstaffing in certain locations.”

Employees at airports in Los Angeles, Atlanta, Dallas, Miami, Baltimore, Detroit, and Cleveland will receive the revised buyout and extended leave options. Other affected cities include Burbank, Long Beach, San Jose, and Santa Ana, California; Tampa, Fort Lauderdale, and Fort Myers, Florida; Myrtle Beach, South Carolina; Portland, Oregon; Buffalo, New York; and Corpus Christi, Texas.

‘Even Better’ Transformation Plan

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These buyouts appear to be part of Southwest Airlines’ previously reported “even better” transformation plan.

The initiative was announced back in September at its Investor Day briefing in Texas. This program aims to maintain free checked baggage while improving customer satisfaction and increasing revenue.

Proposed elements of the plan consist of:

• Assigned Seating: Based on the desires of 80% of Southwest customers, this feature is scheduled to launch in 2025.
• Premium Seating Options: Increasing comfort and revenue by providing more legroom for guests.
• International Partnerships: To increase travel possibilities, Icelandair will be the first partner in 2025.
• Getaways by Southwest: Starting in 2025, these vacation packages can be customized.

By 2027, Southwest Airlines wants to generate $4 billion in total earnings before interest and taxes (EBIT) and achieve a minimum 15% return on invested capital (ROIC). A $2.5 billion share repurchase program was approved by the board, demonstrating their faith in the strategic plan.

In September, Robert “Bob” Fornaro was also named to the board of directors of Southwest Airlines. Fornaro has been in the airline business for more than 40 years. He was the president and CEO of Spirit Airlines and AirTran Holdings Inc. He also has a thorough understanding of Southwest’s business strategy, which Executive Chairman Gary Kelly recognized as being helpful for the board’s continuous renewal.

In the last three years, the board has recruited 10 new directors. With degrees from Harvard University and Rutgers College, Fornaro said he was excited to work with Southwest on its transformation plan. He is already on the boards of Avianca and WestJet.