Southwest Airlines announces first mass layoffs in 50 Years, 15% of corporate workforce affected

For the first time, Southwest Airlines will lay off over 1,000 people, or one of seven employees, at its corporate headquarters. The company announced the cuts will start in April and include senior leadership. Eleven senior leadership positions, which include vice presidents and above, will be eliminated.

According to Business Insider, the layoffs would help it save about $210 million in 2025 — excluding severance packages and post employment benefits, which could cost it $60 million to $80 million — and about $300 million in 2026.

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Why will Southwest Airlines have its first layoffs?

The unprecedented move comes amid a gigantic shakeup at one of North Texas's biggest employers. Steve Cosgrove, publisher of Airways magazine, said employees were struggling to cope with the uncertainty after layoffs were announced.

"This decision in unprecedented in our 53-year history", Southwest President and CEO Bob Jordan said in a statement.

Southwest has had a chaotic few years. Activist investors pointed out last year that the carrier's share price was down more than 50% from early 2021.

Elliot Investment Management, an activist firm that took a stake in Southwest in June, has been pushing for changes at the carrier, including a restructuring of its board and updates to its business model.

According to CNN, the company started the year with a new chief financial officer, Tom Doxey, who most recently was president of Breeze Airways. Southwest's previous chief financial officer Tammy Romo and chief administration officer Linda Rutherford will retire from their positions in April 2025.

Also, the Texan company had a financial hit after an operational meltdown caused 16,700 flights to be cancelled in late December's busy holiday travel week. On the report of CBS News, the staff blamed the antiquated scheduling software.

Southwest Airlines isn’t the only low-cost carrier implementing cost-saving strategies amid an evolving industry landscape.

In July, Spirit Airlines announced plans to bundle à la carte services—such as snacks and checked bags—aimed at attracting premium passengers.

That same month, JetBlue Airways revealed that it would postpone the addition of over 40 new aircraft to its fleet, pushing deliveries back to 2030 or later.

Here's Southwest CEO Bob Jordan statement to employees on Monday, February 17

Southwest Team:

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.