Southwest Airlines Announces 15% Corporate Workforce Layoffs as Part of Cost-Cutting Plan

Southwest Airlines Announces 15% Corporate Workforce Layoffs as Part of Cost-Cutting Plan

Southwest Airlines is laying off 1,750 employees, or 15% of its corporate workforce, as part of a broader strategy to save $210 million in 2025, according to a report by AP on February 18. This marks the airline's first significant layoffs in 53 years.

The cuts will primarily focus on "corporate overhead and leadership positions," including senior leadership and directors. Eleven senior leadership roles will be vacated, making up 15% of the company's senior management team. The layoffs are expected to be completed by the end of June 2025, with the goal of transforming the company into a "leaner, faster, and more agile organization," said CEO Bob Jordan.

These reductions are part of Southwest's effort to boost profitability and streamline operations. The company anticipates saving approximately $210 million in 2025, with savings increasing to nearly $300 million in 2026.

Southwest has faced pressure from hedge fund Elliott Investment Management, which holds a significant stake in the company and has pushed for improved profits and stock performance. As of February 18, Southwest's stock has dropped 9.9% year-to-date.

In November 2024, Southwest also offered buyout packages and extended leave options to airport workers in order to address potential overstaffing at certain locations. Despite these measures, the airline is continuing to face challenges amid growing external pressure to improve its financial performance.

In October 2024, Southwest reached an agreement with Elliott to avoid a proxy fight, but Elliott's influence grew with the addition of several seats on the airline’s board, allowing the hedge fund to exert continued pressure on CEO Bob Jordan and other executives.

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