Southwest Airlines to cut 15% of corporate workforce

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DALLAS (UPI) — Southwest Airlines plans to slash 15% of its corporate workforce — the first mass layoffs in the company’s decades-long history — as the airline looks to cut costs.

Southwest announced Monday a “reduction in corporate overhead workforce” that will impact approximately 1,750 employees in leadership positions, including 11 senior leadership positions of vice president and above.

“This decision is unprecedented in our 53-year history, and change requires that we make difficult decisions,” said Bob Jordan, president, chief executive officer and vice chairman of the Board of Directors.

“We are at a pivotal moment as we transform Southwest Airlines into a leaner, faster and more agile organization,” Jordan added.

Last month, the Biden administration announced it was suing Southwest Airlines over “chronically” delayed flights.

According to court documents, the U.S. Transportation Department accused Southwest of consistently operating late flights, without adjustments, while continuing to “use unrealistic schedules” for marketing.

Southwest said it was “disappointed that DOT chose to file a lawsuit over two flights that occurred more than two years ago,” adding that the suit represents “an unrealistic schedule when compared with performance over the past 15 years.”

Monday’s job cuts also follow last year’s settlement with activist hedge fund investor Elliott Investment Management, and a subsequent agreement to restructure Southwest Airlines’ board. Elliott Investment Management took a $1.9 billion stake, or 11%, in the airline last June. The settlement forced Southwest to abandon its long-held open seating model and introduce overnight “red-eye” flights.

Southwest estimates savings from the layoffs will total approximately $210 million for the remainder of this year, with full-year 2026 savings expected to reach approximately $300 million. The savings do not account for severance and post-employment benefits, which are expected to range between $60 million and $80 million.

“I arrived at this decision thoughtfully and carefully, knowing how hard it will be to say goodbye to colleagues who have been a significant part of our Southwest culture and accomplishments,” Jordan said in a memo to employees as he announce the “very difficult and monumental shift.”

“I’m grateful to all Southwest employees who have shared in our legendary history and to those that will guide us into the next era of Southwest Airlines.”