Southwest Airlines has announced a significant reduction in its corporate workforce, cutting 15% of its staff as part of a strategic effort to streamline operations and reduce costs. The layoffs will affect approximately 1,750 positions, including 11 senior leadership roles, as the airline aims to create a more agile and efficient organization.
CEO Bob Jordan emphasized the necessity of these changes in a statement, describing the current moment as pivotal for the airline’s future. He stated, “We are at a pivotal moment as we transform Southwest Airlines into a leaner, faster, and more agile organization.” The airline is implementing these reductions to improve its financial performance in response to pressure from activist investors, particularly Elliott Investment Management, which recently acquired a $2 billion stake in the company.
Most of the job cuts are expected to be finalized by the end of the second fiscal quarter of 2025. The airline anticipates that these layoffs will result in approximately $210 million in savings for fiscal year 2025 and $300 million for the full fiscal year 2026. However, the company will incur costs of between $60 million and $80 million in severance payments and post-employment benefits during the first quarter of 2025.
In addition to the layoffs, Southwest has halted certain corporate events and paused hiring, including summer internships, to control discretionary spending. CEO Jordan highlighted the importance of every dollar saved as the airline strives to regain strong financial performance.
The recent changes come as part of a broader plan announced last fall, which includes minimizing hiring, optimizing scheduling efficiency, and improving corporate operations. The airline is targeting a $500 million run rate in savings by 2027. During an investor day in September, Southwest outlined several initiatives aimed at enhancing customer experience and operational efficiency, such as introducing assigned seating, evolving its boarding process, and launching red-eye flights beginning in February.
These measures reflect Southwest’s commitment to adapting to market demands and improving its overall financial health in a competitive industry.