Southwest Airlines is planning to eliminate an estimated 1,750 positions — about 15% of its corporate workforce — in what will mark the company's first major job cuts in its 53-year history.
The Dallas-based airline announced Monday that the layoffs — which are slated to begin in late April — are focused "almost entirely" on corporate and senior leadership positions. Southwest said the move is an attempt to cut costs and transform the airline into a "leaner, faster, and more agile organization."
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"As we continue to work together to transform our Company, an area of intense focus will be maximizing efficiencies and minimizing costs," Southwest President and CEO Bob Jordan said in a statement. "We must ensure we fund the right work, reduce duplicative efforts, and have a lean organizational structure that drives clarity, pace, and urgency. Improving how we work together and how we get work done has a tremendous impact on our efficiency as a Company and how we deliver against our plan."
Southwest estimates the job cuts will save the company more than $500 million over the next two years, according to The Associated Press. The airline said employees whose jobs are being eliminated will also receive severance and be offered resources to answer any questions they may have.
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The announcement comes after hedge fund Elliott Investment Management — which owns an 11% stake in Southwest — urged the company in June of last year to improve its finances. Then in November, Southwest offered buyouts and extended leaves of absence to group operations workers at 18 airports to address "overstaffing" issues amid a shortage of new planes from Boeing.
Southwest shares are down about 9% since the beginning of this year. The company's stock price continued to fall slightly when markets opened Tuesday morning.
