Southwest Airlines announces layoffs as company faces turmoil

Dallas-based Southwest Airlines announced Monday that it's laying off 15% of its corporate employees.

About 1,750 employees will be affected, according to a release from the airline. Eligible employees will continue to receive salary and benefits until April. They'll also receive severance pay and help to find new jobs.

Southwest CEO Robert Jordan called the layoffs an "extremely difficult decision.”

"With the best intentions, the growth of our Leadership and Noncontract functions have outpaced our operation’s growth for many years," Jordan said in a statement posted to the company's website. "Now, this group must become more lean, efficient, and agile to better serve our Frontline Employees in our shared mission of serving our Customers."

The company lists minimizing costs and increasing efficiencies as reasons for the layoffs.

Southwest has faced financial and legal challenges in recent months. The company posted lower-than-expected earnings in its 3rd quarter of 2024.

"I want to acknowledge that recent financial performance is not up to your or to my expectations," Jordan told investors in September.

The U.S. Department of Transportation sued Southwest for illegally operating multiple chronically delayed flights, according to a lawsuit filed last month. Between April and July of 2022, an investigation found one Southwest flight between Chicago Midway and Oakland, California was late between 59% and 76% of the time. The suit alleged Southwest did not adjust its schedule during that time.

"Airlines have a legal obligation to ensure that their flight schedules provide travelers with realistic departure and arrival times," said U.S. Transportation Secretary Pete Buttigieg.

Southwest said it's "disappointed" over the department's suit for flights that occurred more than two years ago.

The airline announced restructuring of its board in October as part of a settlement with investment management firm Elliott. The firm previously pressured Jordan to resign. He said in June that his leadership team had plans to boost the airline's financial performance. The company announced initiatives to boost revenue, including assigned seating.

Regarding the layoffs, Jordan said in the airline's press release that they're necessary to help the company move forward.

"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," he said.

Got a tip? Email Caroline Love at clove@kera.org. Caroline Love is a Report For America corps member for KERA News. KERA News is made possible through the generosity of our members. If you find this reporting valuable, consider making a tax-deductible gift today. Thank you.