Southwest Airlines cuts 1,750 corporate jobs

Southwest Airlines announced a significant workforce reduction, cutting approximately 1,750 corporate positions, representing 15% of its corporate staff, in what CEO Bob Jordan called an "unprecedented" move in the company's 53-year history. The restructuring, which includes eliminating 11 senior leadership roles, aims to achieve annual cost savings of $300 million starting in 2026, with expected savings of $210 million in 2025.

The airline expects to complete most layoffs by the end of June 2025, though it will incur a one-time charge of $60-80 million in the first quarter of 2025. This decision is part of a broader three-year turnaround strategy announced in September, which includes new partnerships, vacation packages, and aircraft sale-leaseback arrangements to improve profitability.

Despite reporting strong fourth-quarter profits driven by improved airfares and robust holiday demand, Southwest's stock has declined approximately 10% this year, contrasting with gains seen by competitors Delta and United Airlines. The company faces multiple challenges, including rising operational costs, labor expenses, and aircraft maintenance, compounded by delivery delays of Boeing 737s.

The restructuring comes as Southwest appointed Tom Doxey as the new Chief Financial Officer following Tammy Romo's retirement announcement. The airline is also responding to pressure from hedge fund Elliott Investment Management, which has secured board seats to influence corporate strategy.

These changes reflect Southwest's adaptation to market conditions in a competitive industry, marking a significant departure from its historical employment practices. The airline previously addressed staffing issues through voluntary buyouts and leaves for airport workers, but this marks its first major involuntary reduction in corporate positions.