Southwest Airlines Is Slashing 1,750 Corporate Jobs To Cut Costs

To create a “leaner, faster, and more agile” company, Southwest Airlines is laying off 1,750 people, about 15% of its workforce. The job cuts are directly aimed at trimming corporate staff and will include some leadership positions.

Most of the jobs should be eliminated by the end of the second quarter. Among them, 11 upper management positions will be axed, according to CNN.

“This decision is unprecedented in our 53-year history, and change requires that we make difficult decisions,” said CEO Bob Jordan in a company statement. “We are at a pivotal moment as we transform Southwest Airlines into a leaner, faster, and more agile organization.”

The layoffs will save Southwest over $500 million over the next two years. Roughly $60 million to $80 million will be spent on costs related to the job cuts, including severance packages.

In addition to layoffs, Southwest has put a hold on hiring and paused its internship program. Future team-building “rallies,” a 40-year tradition at the company, have been paused, and unprofitable routes were also axed.

Making such a move was somewhat unprecedented for Southwest, which boasted in 2021 that the airline has never cut jobs since operations began. Yet, layoffs did happen when the company cut 300 pilots and flight attendants from the company roster late last year.

Making an ‘Even Better’ Southwest Airlines

The job cuts are part of a larger plan to boost profits. After doing business roughly the same way for 50 years, Southwest Airlines implemented a bold strategy to gain market share. According to Jordan, today’s travelers have changed their flying behavior, and it’s time for the airline to adapt.

Southwest’s “Even Better” transformation plan includes taking away Southwest’s long-held open seating policy. Instead, the airline is offering assigned seats and more legroom options, which will be an upgrade that increases ticket costs. Overnight flights are also being added to the schedule.

“Customers are just taking fewer short haul trips today. They’re flying longer, and when they fly longer, the importance of an assigned seat goes up,” Jordan said last year, according to CNBC.

Fortunately, travelers will still be able to take advantage of Southwest’s two free checked bags policy. Company data suggests the “bags fly free” promotion is the top reason customers fly Southwest.