by
New York
CNN
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Southwest Airlines said on Monday that it will reduce 15% of his business workforce, or 1,750 people – the first massive fired in the history of the company.
The cuts start in April and include senior leadership, the company announced. Eleven senior leadership positions, including vice presidents and higher, will be eliminated.
Southwest said that the dismissal expected to save the company this year $ 210 million and $ 300 million in 2026. It expects a one -off costs between $ 60 million to $ 80 million for costs such as severance payment.
“While we continue to work together to transform our company, an area of intense focus will be maximizing efficiency and minimizing the costs,” said Bob Jordan from the southwest in a note to employees on Monday. Jordan called the fired “a very difficult and monumental shift.”
Southwest has had chaotic for a few years. Activist investors have pointed out Last year the share price of the courier had fallen by more than 50% compared to the beginning of 2021. It exceeded the analyst expectations in his last income released in January, but that was due to the rising flight rates.
In June 2024, Hedgefonds Elliott Investment Management took on a $ 1.9 billion interest in the courier and called for a revision of leadership and operations a few months later.
The company started the year with a new Chief Financial Officer, Tom Doxey, who was recently president of Breeze Airways. Southwest’s previous Chief Financial Officer Tammy Romo and Chief Administration Officer Linda Rutherford will withdraw from their positions in April 2025.
The Shakeup goes beyond the managerial leadership. Elliott Investment also insisted on changes that led to the reversal of the open session of the airline to assigned seats. Due to the assigned seats, the airline can charge more for premium seats.
Southwest took a financial hit after an operational Meltdown caused 16,700 flights that were canceled at the end of December. The employees of the airline blamed the planning of outdated personnel planning software that made its activities difficult to recover from seasonal bad weather.
As early as 2021, the company had bragged about never fired.
“It all leads to a strong desire to take good care of our people and then in turn our customers. That is why we have never had a resignation, “said former CEO Gary Kelly in an interview in 2021 about Yahoo Finance.
Chris Isidore of CNN has contributed to this report.
