Southwest Airlines to slash 15% of corporate jobs in 'unprecedented' move to cut costs

Southwest Airlines Monday said it is about 15% of business jobs, or about 1,750 people, a move, a move called the CEO “unprecedented”, while the company is climbing to save costs.

The company said it expects the savings of the $ 210 million cuts this year and around $ 300 million in 2026. The dismissals will usually be done by the end of the second quarter and some senior leadership roles, said CEO Bob Jordan in a staff note , it was seen by CNBC.

“This decision is unprecedented in our 53-year history and change requires that we make difficult decisions,” Jordan said in a press release. “We are at a crucial moment while we transform Southwest Airlines into a slimmer, faster and more agile organization.”

The decision of Southwest to cut jobs, a few months after a settlement with activist investor Elliott Investment Management, who won five Southwest Board seats, is short of control. The company had also insisted on Jordan to be replaced as a CEO, although it was not successful.

Other recent cost -saving measures in Southwest were freezing, a break for the internship program and an end to team building “Rallies”, a business tradition dating from 1985, CNBC reported earlier. It has also cut aggressive unprofitable routes.

Last year, Southwest outlined a plan to increase the win, including throwing away his more than 50-year-old open seating model for assigned seats and making a section with extra legroom. It also recently launched overnight flights for the first time.

“We must ensure that we finance the right work, reduce duplication efforts and have a lean organizational structure that drives clarity, pace and urgency,” Jordan said in his memo on Monday.

The dismissals will come into effect at the end of April, Jordan said, adding that most affected employees will not work, but still receive salary, benefits and bonus until then.