American Airlines To Cut 30% Of Management Jobs

It looks like American Airlines plans to lay off about 30% of management and support staff over the coming weeks, as the airline prepares to shrink significantly.

Airlines can’t lay off employees involuntarily yet

Airlines received a total of around $50 billion in grants and loans through the CARES Act. One component of that was the payroll support program, and with this airlines had to promise that they wouldn’t involuntarily lay off any employees until at least October 1, 2020.

As a result:

US airlines have to pay employees through September 30

American’s plan to cut 30% of management roles

As reported by View from the Wing, American Airlines is preparing to lay off about 30% of management and support staff. For anyone up to a Level 6 Manager, the company has two voluntary packages to choose from. The company has also outlined what an involuntary package would look like come October 1, which is pretty significant.

The first voluntary package offers the most pay, with the following terms:

  • Receive six months of pay at 33%, with payroll through December 31, 2020
  • The last day worked would be in mid-June
  • For medical, receive active rates for six months, and 18 months COBRA
  • Receive active travel benefits through December, five years of D2R status post separation, and retiree travel eligibility will be reduced by five years
  • Receive 250,000 AAdvantage miles

The second voluntary package offers the best travel and health benefits, with the following terms:

  • Receive three months of pay at 33%, with payroll through September 30, 2020
  • The last day worked would be in mid-June
  • For medical, receive active rates for 21 months
  • Receive active travel benefits through September, 10 years of D2R status post separation, and retiree travel eligibility will be reduced by five years
  • Receive 350,000 AAdvantage miles

In other words, the first package offers an additional month of pay, while the second package offers better health insurance, an additional five years of travel benefits, an additional 100,000 miles, etc.

Then American also outlines what should be expected for those who don’t accept one of the packages, but who are laid off. Interestingly while the company has to pay everyone through September 30, the plan is to already lay off employees as of mid-July, but just keep paying them. The terms would be as follows:

  • The last day worked would be in mid-July
  • Receive three months of pay at 100%, with payroll through September 30, 2020
  • For medical, receive active rates through September 30, and 18 months COBRA
  • Receive one year D2R status post separation
  • Receive no AAdvantage miles

Once again, the above is for up to Level 6 Managers, and Senior Directors and above will receive different offers.

Clearly American Airlines really wants people to accept a voluntary separation package, because for most people that’s a much better deal than the involuntary package.

American has two voluntary packages for employees to choose from

A change of messaging from American Airlines

American Airlines has been doing a fairly good job throughout this pandemic in terms of how the airline has treated employees and customers, especially compared to United:

Up until this point I don’t ever recall Parker saying that there would be any layoffs at the airline, but rather he has suggested that they could get enough people to voluntarily resign.

Maybe American management thinks they can get enough people to volunteer, but this is still a noteworthy change in messaging. For the first time, American is making it clear that layoffs are otherwise coming in weeks.

Arguably this was inevitable, though. It’s going to take years for airlines to recover, American will be a smaller airline, and United Airlines also recently presented plans to lay off 30% of management. It’s not surprising to see American match.

American is making it clear that involuntary layoffs are coming

Bottom line

American Airlines plans to cut 30% of management and support roles in the coming weeks. The airline has two voluntary packages for employees, and the airline has also laid out what an involuntary package would look like.

Even though American has to pay employees through September 30, the airline already plans layoffs as of mid-July, but will just keep paying employees for a few months.

As far as I know, this also marks the first time that American management has concretely presented what an involuntary separation package would look like.

Are you surprised by these American Airlines job cuts?

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Mirza Guest

Should have done that way before the pandemic.

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LL Guest

Here is a thought for all the airlines and for us the customer. Remember those seats we all rode on ten - twelve years ago? Remember the size and the placement of those seats, remember how much they reclined, remember how easier it was to get on and off the planes? Remember how much leg room we had? Go back to the days when it was "comfortable" to travel by air. Which ever airline goes back to the original seating plans for First Class, Business Class and just good ole Economy Class they will be the one that will capture more business and to be able to brag to the stock holders we are flying closer to full capacity (since there will be less passengers on those planes) and yes, with less passengers on each plane they then can figure out what size of cabin crew is needed for Great Service that can be bragged about, I see nothing but a Win-Win-Win scenario for all parties involved.

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Josh Guest

This is what they think of their workforce? What a POS company!! Should be paying minimum of $50,000 per person to leave with no benefits or Mickey Mouse offers like standby travel or miles that could and most likely be devalued! Shameful American!

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[email protected] Guest

Being without health during a pandemic is frightening.

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Wade Guest

Very disappointing, considering that all of this was entirely self-inflicted and avoidable. There was never any need to close borders, issue stay at home orders, close hotels, quarantine ships, cancel flights, close businesses, play tricks with refunds, issue stimulus packages, inconvenience the masses, ask people to wear masks, or force massive unemployment increases. All we really needed was for a relatively small subset of the population to voluntarily self-isolate and social distance until a vaccine was discovered or some other mitigation was discovered. Young fools...only now, at the end, do people understand. We’re all paying the price for their lack of vision!

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