We’ve had reason to believe that Southwest Airlines would be making a big announcement, and we now have the details of what it is.
Southwest Airlines plans corporate & leadership layoffs
Southwest Airlines CEO Bob Jordan has announced internally that the company will be laying off many employees, including those working in corporate and leadership positions. The expectation is that the company will be laying off around 1,750 people, representing around 15% of employees in corporate positions. The company expects savings from the cuts of $210 million for this year, and $300 million in 2026.
Two different sets of memos went out, both signed by Jordan. Here’s the first memo that went out to employees:
We are at a pivotal moment as we carry out our three-year business plan to transform Southwest Airlines.
As we continue to transform our Company, we must ensure we fund the right work, reduce duplicative efforts, and have a lean organizational structure that drives clarity, pace, and urgency.
We must improve how we work together, maximizing efficiencies and reducing costs. To achieve this goal, we have made the difficult decision to reduce our workforce, almost entirely in Corporate and Leadership positions. At 4 p.m. today, I will send a message to all Employees sharing this news and outlining next steps.
This is a challenging shift that will be difficult for all of us, and we are focused on treating our People with care and respect throughout this process. Beginning at 6 p.m. today, the main Headquarters building (HDK) will be closed, and Noncontract Employees who work at the Headquarters Campus and aren’t required to be on campus for operational or training purposes will be instructed to work remotely. TOPS and Wings will remain open for functions neccessary to business continuity, like the NOC and required training.
Tomorrow morning, Noncontract Employees will receive appointments for virtual meetings in which they will be given more information about their employment status. Most Employees impacted will no longer work for the Company but will remain employed by Southwest until late April. During this time, impacted Employees will continue to receive salary, benefits, and a bonus (if eligible), as well as resources to help answer questions and prepare for the future.
I know this will be hard, but we will get through it together.
Then here’s the second memo that was posted publicly, which has softer wording:
We are at a pivotal moment as we carry out our three-year business plan to transform Southwest Airlines. Our transformational plan is the largest and most comprehensive in our 53-year history, and it focuses on three simple but powerful objectives. First, boost revenues and loyalty by offering our Customers the experience they want; second, maximize efficiencies and minimize costs; and third, make the most of our investments.
As we continue to work together to transform our Company, an area of intense focus will be maximizing efficiencies and minimizing costs. We must ensure we fund the right work, reduce duplicative efforts, and have a lean organizational structure that drives clarity, pace, and urgency. Improving how we work together and how we get work done has a tremendous impact on our efficiency as a Company and how we deliver against our plan.
We have made the very tough decision to move forward with a reduction in our workforce, focused almost entirely on Corporate and Leadership positions. This reduction affects approximately 1,750 Employee roles, or 15% of Corporate positions. Separations do not begin until late April. Until then, most Employees who are notified of their displacement will not work but will continue to receive their salary, benefits, and bonus, if eligible.
This is a very difficult and monumental shift, and I arrived at this decision after careful and thorough reflection, knowing how hard it will be to say goodbye to Cohearts who have been a significant part of our Culture and our accomplishments.
We are dedicated to operating safely and reliably for our Customers every single day. The fundamental objective of Leadership and Noncontract roles is to support our Frontline Employees as efficiently and effectively as possible. With the best intentions, the growth of our Leadership and Noncontract functions have outpaced our operation’s growth for many years. Now, this group must become more lean, efficient, and agile to better serve our Frontline Employees in our shared mission of serving our Customers.
What to Expect
This will be hard, and we will treat our People with the care and respect they have earned and they deserve. Impacted Employees will receive severance and will be offered resources to provide an opportunity to ask questions and prepare for the future, like sessions with Human Resource Business Partners, a dedicated Offboarding Support Team, and outplacement services.
Moving Forward Together
This was an extremely difficult decision to make because of its impact on our People—both those who will be directly impacted and those who will remain.
Changing how we work is an essential part of becoming a more agile Company, and it will be a journey. We are building a leaner organization with increased clarity regarding what is most important, quicker decision making, and a focus on getting the right things done with urgency—not unlike our entrepreneurial founding spirit of the 1970s. As we focus on delivering on our plan, our future will be built upon the actions we take today to ensure an even brighter future.
@xJonNYC predicted a major announcement, and indeed, it has turned out to be true. Many of us hoped that the announcement might have some sort of a positive angle to it, but obviously people losing their jobs is terrible, and not what anyone would hope for.
RIP: the old Southwest Airlines is officially dead
Layoffs in general are sad, but I think it can’t be overstated just how wild this whole situation is for a company like Southwest. Historically, Southwest has been all about its corporate culture, and has prided itself in never having layoffs in its 53 year history, even during the worst of times.
What’s so disappointing about this news isn’t just the layoffs as such, but also the tone of the first memo — the company is essentially locking employees out of headquarters, and frankly, the entire memo comes across as kind of callous. Like, “we will get through it together.” You mean, except for the huge number of people who are losing their jobs?
Southwest is of course dealing with Elliott Investment Management, the activist investors who want the company’s profitability to improve considerably, and they’ve been pushing for major changes.
I think it goes without saying that this change was pushed by Elliott, though I think the firm is probably underestimating the extent to which the company’s corporate culture is being destroyed here. Admittedly morale at the company has been decreasing for some time, but if this doesn’t completely kill it, then I don’t know what will. A 15% cut in corporate jobs is massive, so even for the 85% of people who keep their jobs, they’ll never feel the same way about the company.
The thing is, it’s not like Southwest is in a dire position, or is losing money — the company just isn’t as profitable as it used to be, and is taking action to correct that. I mean, the company has been planning an additional $750 million accelerated share repurchase program for this very quarter (the first quarter of 2025). If all of this doesn’t sum up corporate greed and why many people hate big corporations, then I don’t know what does.
I have to imagine that Herb Kelleher would roll over in his grave seeing what’s going on at the airline that he built. As Herb famously said back in the day:
Your employees come first. And if you treat your employees right, guess what? Your customers come back, and that makes your shareholders happy. Start with employees and the rest follows from that.
What we’re seeing here is the complete opposite of that. The focus is on making shareholders happy right now, at the expense of employees.
Is there more Southwest Airlines news coming?
While we’ll see how this plays out, @xJonNYC suggests that there might be more news coming from Southwest. We don’t know anything additional as of now, though one wonders if these cuts are coming ahead of some other announcement.
Bottom line
Southwest Airlines has revealed plans for significant layoffs, which will be the first in the company’s history. The expectation is that 1,750 management jobs will be cut, representing roughly 15% of that workforce.
This is a major departure from what Southwest has stood for over the past 50+ years. I truly think this is the end of the “old” Southwest, in terms of the company having a significant culture advantage. My thoughts are with those losing their jobs, and for the general loss of an airline that for so long tried to differentiate itself in how it took care of people.
What do you make of the Southwest layoffs?
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