On February 18, 2025, Southwest Airlines announced it will cut 15% of its corporate workforce, equating to approximately 1,750 employees. This decision marks the first major layoffs in the airline’s 53-year history, aimed at addressing significant profitability challenges.
- Southwest Airlines cuts 15% of workforce
- First major layoffs in 53 years
- Expected savings of $210 million in 2025
- CEO Bob Jordan addresses impacted employees
- Industry-wide cost-cutting among budget airlines
- Changes to seating policy to increase revenue
Southwest Airlines is responding to its recent financial struggles by laying off 1,750 employees, which represents 15% of its corporate workforce. This unprecedented move is part of a broader strategy to enhance profitability as the airline faces declining profits. The layoffs are projected to save the company approximately $210 million in 2025, with additional savings of around $300 million anticipated for 2026. However, severance packages and post-employment benefits could add an estimated $60 to $80 million in costs.
CEO Bob Jordan communicated to employees that the severance process will begin in late April, during which affected workers will continue to receive their pay, benefits, and bonuses. The airline has been under pressure from Elliott Investment Management, an activist firm, which has advocated for changes in the company’s governance and business model. In response to these pressures, Southwest has already announced plans to end its open-seating policy and has made adjustments to its flight crew positions.
Other budget airlines are also implementing cost-cutting measures in light of industry changes. For instance, Spirit Airlines plans to bundle services previously offered a-la-carte, while JetBlue Airways is delaying the delivery of more than 40 jets until 2030 or later. Frontier Airlines is introducing a new business-class-like cabin to attract more customers. These actions reflect a trend among low-cost carriers to adapt to a challenging market environment.
The layoffs at Southwest Airlines signify a critical shift in the airline’s operational strategy as it seeks to navigate financial difficulties. With significant savings targeted for the coming years, the airline is taking steps to stabilize its business amid a changing industry landscape.
