American Airlines CEO Doug Parker and President Robert Isom have sent out a letter to American employees today announcing upcoming layoffs. This comes nearly five years after the integration between American and US Airways, and reflects the number of redundant positions they have at this point.
Here’s the letter that was sent out to employees in its entirety, which is worth a read:
Dear Management and Support Staff Team Members,
Earlier today, we held our quarterly director and above meeting where we discussed our need to operate more efficiently and build the next generation of leaders.
We’ve been talking about playing the long game for some time and an important piece of this is creating the right organizational structure for the future. Our current organizational structure resulted largely from integration work that followed our merger and, as all companies do from time to time, we need to evaluate our current organization with a goal to operate more productively. This work starts at the top.
As a result of the integration work required, American has more director and above leaders than we require for the long term. It is a worthy exercise to consider each leader’s span of care (how many direct reports one has), individual performance, and growth opportunities within each area. Over the next several weeks, our top leaders will engage in career conversations with their director and above team members that will include both some involuntary exits as well as an option for those who have been with the company for at least two years to leave American voluntarily with severance benefits. Similar to early outs that have been offered to several of our frontline groups, this is an opportunity for team members at those levels to reflect on their current roles and their futures. It will also give department leaders the opportunity to potentially combine positions at those levels. The outcome will provide future growth opportunities for team members who have not yet reached the level of director, and reduce overall positions of higher management.
Reviewing our current structure and having this dialogue with top leaders is a productive way to appreciate what has been created thus far, build on that momentum for the future, and open new paths of career progression for the next generation of leaders. While much of this restructuring will happen at the director and above level, we will also take the opportunity to look at our non-frontline facing management structure. The majority of improving efficiency at those levels will happen through the elimination of open positions and attrition. However, as leaders take the time to look at their organization, there is the potential for some involuntary departures as well. In those cases, impacted team members would also receive severance benefits and outplacement assistance.
We are nearly five years into integration. While not all integration work is complete, much of it is and as a result, now is the right time to look at the organizational structure we need for the future. This will require all of us to challenge the way we have always done things and think creatively and broadly about American’s very bright future. Thank you for being part of this journey and for all you do for American.
First of all, kudos to Parker and Isom for using just about every corporate word imaginable, possibly with the exception of “synergies” and “enhancement.”
In all honesty, I have to give them credit for the transparent way they’re communicating here, and this actually seems logical enough. Based on what I’ve heard from those in management, they do indeed have way too many director-level employees due to the merger, and it’s time for things to be cleaned up a bit.
Of course I’ll be sad for anyone who loses their job, as that’s never fun, though structurally it seems to make sense. They say they’re evaluating their organization starting at the top, though personally I think it’s a shame that they’re not starting at the very top. 😉