Southwest Airlines (NYSE: LUV) is cutting 15% of its corporate workforce, breaking with its 53-year history of avoiding mass layoffs.
The airline announced Monday it will eliminate 1,750 positions, including 11 executive roles at the vice president level or higher, with most reductions to be completed by the end of June 2025.
Financial benefits from the workforce reduction are projected at $210 million in 2025, rising to $300 million the following year. The restructuring will trigger severance and benefit payouts totaling $60 million to $80 million.
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“We are at a pivotal moment as we carry out our three-year business plan to transform Southwest Airlines,” Chief Executive Bob Jordan said in a message to employees. “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.”
Financial benefits from the workforce reduction are projected at $210 million in 2025, rising to $300 million the following year. The restructuring will trigger severance and benefit payouts totaling $60 million to $80 million.
Elliott Management pressured Southwest for changes after building a roughly 10% ownership stake last year. The activist fund criticized the airline’s cost controls and profit margins, pushing for operational reforms.
Southwest’s strategic overhaul extends beyond staffing cuts. The carrier is abandoning its long-standing open-seating system, introducing premium seating options, and commencing overnight flights to boost aircraft utilization.
While maintaining its position as the largest domestic US carrier by flight volume, Southwest has struggled with rising operational costs despite strong customer satisfaction ratings. The airline’s storied profit streak, spanning nearly five decades, ended in 2020 amid pandemic disruptions, though it has remained profitable since.
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