Recently Delta reported record third quarter revenue and a double-digit operating margin, and now… Delta is laying off employees? Airlines’ outlooks are evolving very quickly…
In this post:
Delta eliminating some corporate jobs
As reported by CNBC, Delta has this week revealed that it will be cutting some corporate jobs, with the goal of cutting costs as the industry deals with higher expenses for fuel and labor. Here’s how Delta described these job cuts in a statement:
“While we’re not yet back to full capacity, now is the time to make adjustments to programs, budgets and organizational structures across Delta to meet our stated goals — one part of this effort includes adjustments to corporate staffing in support of these changes. These decisions are never made lightly but always with care and respect for our impacted team members and the Delta family.”
Frontline workers, like flight attendants and pilots, aren’t impacted by these changes. Rather, Delta is describing this as a “small adjustment” that impacts some corporate and management positions.
These jobs cuts are significant
Obviously these job cuts have the biggest impact on those who are losing their jobs. However, I can’t help but point out the symbolic significance of this. At the beginning of the pandemic, when no one knew what the future held for airlines, airlines offered staff all kinds of buyouts to get them to voluntarily leave their roles. However, ever since, the legacy carriers have been hiring at an unprecedented rate.
It’s quite jarring to now see Delta reverse course. It’s one thing to reduce or stop hiring, but the airline is now laying off employees in order to manage costs? Wow. Since Delta is historically thought of as the strongest of the “big three” carriers, it’s interesting to see Delta be the first carrier to make involuntary cuts. Is that a sign of trouble, or just a reflection of Delta being the best at math? Only time will tell…
I’ve said it before, and I’ll say it again. I don’t think the new labor contracts at airlines are sustainable. They’re based on a “best of times” scenario, and since they can’t be negotiated down short of in bankruptcy protection, I’m curious how that will play out in the coming years. Even as margins in the industry keep getting worse, pilots at Delta will keep getting annual pay increases.
Also, I’m starting to feel like the international travel boom is about to burst, due to global factors at play. With all the current conflicts we’re seeing in the world, and especially with the lack of a solution in the Israel and Palestine conflict, I have to assume this will soon have a greater impact globally. Maybe that’s a topic for a different post, or maybe I’ll just shut up about it for now…
Bottom line
Delta will be laying off some corporate workers in the near future, reflecting the first real layoffs we’ve seen at a US legacy airline since the start of the pandemic. Delta claims it’s doing this because it hired too many people and wants to cut costs, as it deals with higher labor and fuel costs. We don’t know how many people this impacts, but at least symbolically it’s pretty significant.
What do you make of Delta’s layoffs?
So Delta posted a profit but they are laying of merit employees just because they aren't frontline. But they give pilots a 60% raise??? The merit employees go thru this layoff crap every other year right at the holidays. They are killing moral among the merit employees!!! For a company that claims to care about employees they have a really crappy way of showing it. Sadly its always the most loyal (10,15 and 20 year)...
So Delta posted a profit but they are laying of merit employees just because they aren't frontline. But they give pilots a 60% raise??? The merit employees go thru this layoff crap every other year right at the holidays. They are killing moral among the merit employees!!! For a company that claims to care about employees they have a really crappy way of showing it. Sadly its always the most loyal (10,15 and 20 year) employees that suffer. They work their butts off to work their way up the corporate ladder and then are punished because of what they make, but only at TechOps. They NEVER mess with the General Office staff. These layoffs are only because the the big dogs want a larger bonus check!!! During Covid many of the merit employees had to take months off without the regular pay and now that these families are finally getting back on track financially Delta threatens their lively hoods again!
Shame on you Delta
So Delta posted a profit but they are laying of merit employees just because they aren't frontline. But they give pilots a 60% raise??? The merit employees go thru this layoff cr-p every other year right at the holidays. They are ki-ling moral among the merit employees!!! For a company that claims to care about employees they have a really cr-ppy way of showing it. Sadly its always the most loyal (10,15 and 20 year)...
So Delta posted a profit but they are laying of merit employees just because they aren't frontline. But they give pilots a 60% raise??? The merit employees go thru this layoff cr-p every other year right at the holidays. They are ki-ling moral among the merit employees!!! For a company that claims to care about employees they have a really cr-ppy way of showing it. Sadly its always the most loyal (10,15 and 20 year) employees that suffer. They work their butts off to work their way up the corporate ladder and then are punished because of what they make, but only at TechOps. They NEVER mess with the General Office staff. These layoffs are only because the the big dogs want a larger bonus check!!! During Covid many of the merit employees had to take months off without the regular pay and now that these families are finally getting back on track financially Delta threatens their lively hoods again!
Shame on you Delta.
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Hopefully it's the people in the position such as some that dealt with the handling of a dog in Atlanta that was lost by Delta. The management of the whole scenario was a joke. Rude and no communication to the owner until an attorney was involved. Delta did nothing to find this dog. They even sent an email to the owner stating the dog was no longer on airport property and they had ended the...
Hopefully it's the people in the position such as some that dealt with the handling of a dog in Atlanta that was lost by Delta. The management of the whole scenario was a joke. Rude and no communication to the owner until an attorney was involved. Delta did nothing to find this dog. They even sent an email to the owner stating the dog was no longer on airport property and they had ended the search. The dog was on the airport property for 22 days until she was finally found. (Not by Delta)
If your not doing the core work..pilot,fa,ramp,CS
You ARE expendable…
you know when they were talking about the work from home staff,and they didn’t want to come back to the airport, because they were too valuable at home…guess who they are targeting for furloughs
Ben - A disappointing lack of actual analysis. Delta’s capacity and volume is not at prepandemic levels, yet headcount is roughly +10K vs 2019. Just one very simple variable you could have found if you looked. All airlines are fairly bloated at this point as hiring got out of control in an attempt to just meet the unexpected surge in demand.
Yes I think you should be quite fit now and let it play out. You don’t seem to know what you’re talking about.
They probably needed to pay for Tom Brady's salary.
I hope they fire the twit who set DM at $35K
Ed Bastian, CEO
They're probably doing what a lot of corporations are doing now, cutting bottom performers, particularly those that aren't coming into the office and aren't very productive at home. Corporations have held on to these people believing that they won't be able to hire new people, but that trend has begun to turn.
I am curious what your views on international travel for 2024 will look like. We spent two weeks in Switzerland every summer. The hotel we stay at the rates for next year are approximately 20% higher than 2023. Award mileage rates for international travel also seem higher for 2024
Will the executives that approved this over hiring be let go as well? Of course not. As a DM2M I have not received a response to any complaint or concern I have had in over 6 months. So obviously they do not have adequate customer service staff. Delta got greedy with the last Skymiles program changes that they had to walk back. These layoffs probably are to attempt to make up for the cash they...
Will the executives that approved this over hiring be let go as well? Of course not. As a DM2M I have not received a response to any complaint or concern I have had in over 6 months. So obviously they do not have adequate customer service staff. Delta got greedy with the last Skymiles program changes that they had to walk back. These layoffs probably are to attempt to make up for the cash they would have got from the new program changes via increased Amex card usage. Delta is merely a sales tool for Amex
This is disappointing especially knowing that Delta made over a billion dollars in profits this year. It's clearly not about making profits but greed and making more profits...and again its the workers who suffer the collateral damage.
Delta's employees have already accrued more than $1 billion in profit sharing for 2023 -so your argument is substantially incorrect
A 3% profit sharing doesn't cover the loss of a paycheck! Also not all employees get profit sharing benefits.
I wasn't aware that corporations had some moral duty to employ people they don't need because the company is profitable. This seems like a path to unprofitability.
Shameful! After earning billions post- COVID! Not to mention billions stolen during COVID to “help” the industry. Delta has begun using carriers to ship merchandise—a luxury shipper filling cargo space to the max, making unsafe journey with under-trained staff. They don’t need casual flyers!
Corporations that offer service are profitable only BECAUSE of their employees. Though they claim they don’t need them, their service will indeed suffer. Watch. Next, you will wonder if there is a “moral obligation” to the customer who pays them.
I think you mean revenue. And yes, record revenue, driven by higher prices due to historic demand (not volume as that has been limited by capacity). Operating profit is still lower than pre-pandemic. That’s a problem. Revenues are higher. Headcount is higher. Profit is lower. This is not a complex decision.
There seems to be more than the usual speculation of the impending bust in the airline and/or global economy. Perhaps the boom is over but as for a significant downturn, I’m not seeing it reflected in premium cabin pricing for next spring on the routes I usually travel. Prices are higher than ever.
I wonder if Tim Dunn will be laid off from his job of commenting on points & miles blogs?
@Tim Dunn believes these cost cutting benefits are necessary because Delta is the best. You guys heard it hear. Also, these cost cutting measures will preserve the PDX-HND route.
This might sound entitled, but I have found business class amenities and service so much poorer quality since the pandemic, when you pay thousands more each than premium economy or economy exit row, I don’t think it is asking to expect a much better service if paying 4 times the price. At least in economy I don’t fell I have thrown good money or points I can spend on tangible items away. And hotel rooms...
This might sound entitled, but I have found business class amenities and service so much poorer quality since the pandemic, when you pay thousands more each than premium economy or economy exit row, I don’t think it is asking to expect a much better service if paying 4 times the price. At least in economy I don’t fell I have thrown good money or points I can spend on tangible items away. And hotel rooms via points have been far more consistent than airline cabins, where I rarely even get an email now asking how was my flight. They just don’t seem to care and I feel we have been milked post lockdowns.
The airline business has been feast and famine since the sale of the 1st airline ticket.
Nature of the beast!!
If you work for an airline you know:
Not enough Pilots
Not enough Flight Attendants
Not enough Gate Agents
Not enough Ground Crew
Not enough Mechanics
Not enough Air Traffic Controllers
Too many Middle Managers
A number of companies believe in the philosophy for corporate/mgmt/headquarters type jobs that a certain percentage of people need to be pushed out of the organization on a regular basis. A rebalancing of the bell curve.
American has believed in it for years as has many big Wall Street companies.
Knowing that you have to perform and have it show in your documented performance evaluations means there are no surprises if you underperform
This isn’t something that’s announced as layoffs though. It’s part of the annual performance cycle because those jobs would eventually be backfilled. What’s happening here is jobs going away which is different and more telling.
Because airlines try to avoid frontline layoffs and to distinguish corporate cuts from frontline cuts, they often do find some justification for corporate cuts.
Like alot of companies, the work ethic post covid has changed and DL is undoubtedly sending the message that alot of other companies are wanting to send - we have standards for performance and we are not watering them down.
It has been 18 months since the uptick in...
Because airlines try to avoid frontline layoffs and to distinguish corporate cuts from frontline cuts, they often do find some justification for corporate cuts.
Like alot of companies, the work ethic post covid has changed and DL is undoubtedly sending the message that alot of other companies are wanting to send - we have standards for performance and we are not watering them down.
It has been 18 months since the uptick in travel which came w/ a big rehiring boom and I suspect that this is related to cleaning out some of the lower performers.
The amount of money saved from corporate job cuts is tiny but the message is much more powerful, esp. given that there are alot of frontline workers that have a perpetual distrust of their mgmt and headquarters staff and execs, whether justified or not.
Mark is spot on. There's a massive difference in jobs being eliminated and headcount decreasing, versus low performers being fired and new employees being hired to replace them.
This is in the jobs being eliminated column. It's not about performance management.
Per the statement they weren't going to meet their 'stated goals' without these cuts. Management miscalculated. These are unplanned layoffs, period.
Delta continues to converge.
it's amazing how many people call Delta execs "liars" when it fits those people's narratives but can't recognize the PR fluff when it goes the other way.
Of course, DL is eliminating positions - only to fill them again in a year or so.
Have you ever worked in a large company before or did you just fall off the turnip truck?
First cut should be brady and the sleezy flight attendants and gate agents
It's the pilot salaries. The C-suite did poor job of negotiating. Now people who are not at fault, doing their jobs, are out of one.
You realize there is a pilot shortage right? Supply is low, prices for piloting services are going to go up. The big 3 didn't have a choice.
They have to compensate for that somewhere. This is planning ahead
Supply won’t be low if some of these airlines buckle (ULCCs)
I can't stand when companies like Delta talk about "family" and then in the next sentence they fire their "family" members. It's tone deaf and completely insincere.
I too believe airlines are in for a world of hurt with the impending travel downturn; all of them will be fighting to get out of these unsustainable contracts in a few years.
"Family" references in company webpages / job postings have started to become a red flag the last couple of years...
Hopefully they clean out those responsible for SkyMiles.....
^ this cannot be emphasized enough.
So executive pay won’t be adjusted. It’s funny how the only option to cut costs at all private companies is to layoff rank and file employees. Executive never reduce a dime of their salary to save even 1 job.
The top-level executive (C suite and the like) usually get pay *increases* for reducing head count at any level (except their own, naturally).
Exactly, at my previous non-profit health insurance (one of the biggest in BCBS system and not publicly traded ), our CEO got ~15% raise (I think he got ~$21m cash) on previous year v/s the rank and file getting ~2.5%. So once folks started talking, the CEO generously gave us TWO additional PTOs. They didn’t carry over but that was so generous of him.
Most C-Suite compensation is in stock. They've already taken a pay cut as their stock price along with others in the airline industry have gone down this year. We may need to pass the hat around for the execs holding Jet Blue stock.
So they keep Brady on! Pay him probably an insane salary. They keep the executive team who really messed up with latest Skymiles changes and showed how detached they are from reality and the products they offer, and definitely caused them to lose some business (and more in 2024), and they cut some corp jobs that probably had nothing to do with their failed strategy!
No numbers provided for how many people this affects.
Large corporations overhired during the past 3 years, now those same companies are cutting headcount due to slowdowns in business, higher wages/cost of benefits and getting ahead of the impact of a possible recession in 2024. This isn't unique to Delta, it's all over. Tech companies are laying off 10,000+ at the drop of a dime.
The money to fund TimDunn needs to come from somewhere!
It sucks for those impacted, but with no information on who is impacted or how many, I don’t see the point of this post? Just idle speculation from a mostly uninformed group of enthusiasts.
Are you daft? Do you fail to underatand that this points to a MASSIVE downturn of the aviation industry - perhaps a downfall.
No, I get it. I've worked in airlines and experienced this sort of thing. But in all my experience having actually been a part of these things and been impacted by them, I've always been amazed at how clueless and uninformed the general public is about what goes on within a company. All idle speculation. Corporate belt tightening happens in every industry, airlines are no different. Not really sure what insightful commentary anybody on this...
No, I get it. I've worked in airlines and experienced this sort of thing. But in all my experience having actually been a part of these things and been impacted by them, I've always been amazed at how clueless and uninformed the general public is about what goes on within a company. All idle speculation. Corporate belt tightening happens in every industry, airlines are no different. Not really sure what insightful commentary anybody on this or any forum can contribute. In my experience, none. And from what I've seen so far, it's all been speculative at best. "oh the execs get more money!" "fire the people who killed skymiles!" etc etc. Not really insightful or meaningful or really representative of what will probably actually happen.
Perhaps there is a huge downturn coming, perhaps it's not as bad as some people fear. We dont know.
We also dont know how many people are impacted or who is impacted, etc, and it's none of our business. Not sure why you call me daft for making these observations. Also am 100% sure that any uniformed/speculative commentary here will have absolutely zero impact on what goes on within Delta as part of their belt tightening, and whether or not that has an impact on the industry's and the economy's larger fortunes as well.
A very long and detailed response with a great many words - however they are words of no consequence or meaning. Only a foolhardy individual would refute my initial comment as it, unfortunately for the industry and world, is true.
What a reply. Really makes no sense. I've lived and worked in airlines and am speaking from experience. Are you? Doubtful.