Southwest Airlines to Cut 15% of Corporate Workforce in Major Restructuring
Southwest Airlines has announced plans to lay off 15% of its corporate workforce, marking the first mass job cuts in the company’s history. The airline confirmed on Monday that approximately 1,750 employees, including senior leadership positions, will be affected, with layoffs set to begin in April.
As part of the restructuring, Southwest will eliminate 11 senior leadership roles, including vice presidents and above. The move is expected to generate $210 million in savings this year and $300 million by 2026. However, the airline anticipates incurring a one-time charge of $60 million to $80 million in severance and other costs.
In a message to employees, Southwest CEO Bob Jordan described the decision as “a very difficult and monumental shift,” emphasizing that cost-cutting and efficiency improvements remain a top priority for the company.
The airline has faced significant financial and operational challenges in recent years. Investor pressure mounted after its stock price fell more than 50% from early 2021, despite better-than-expected earnings in January, which were largely driven by fare increases.
The restructuring follows a $1.9 billion investment in the company by hedge fund Elliott Investment Management in mid-2024. The firm has since pushed for leadership and operational changes, including the retirement of Chief Financial Officer Tammy Romo and Chief Administration Officer Linda Rutherford, who will step down in April 2025.
Elliott Investment also advocated for the reversal of Southwest’s long-standing open seating policy in favor of assigned seating, a shift aimed at increasing revenue from premium seats.
Southwest’s struggles were further exacerbated by an operational meltdown in December 2022, when outdated staff scheduling software contributed to the cancellation of 16,700 flights during the peak holiday travel season.
The layoffs mark a stark departure from Southwest’s previous stance on job security. As recently as 2021, former CEO Gary Kelly proudly stated that the company had never implemented layoffs, citing its commitment to employees and customer service.
