Southwest Airlines announced a significant workforce reduction, laying off 1,750 employees, which represents 15% of its staff, in pursuit of its transformational plan. CEO Bob Jordan stated this initiative aims to boost revenues, minimize costs, and maximize efficiencies. The company expects these layoffs to result in cost savings of $210 million in 2025 and $300 million in 2026, but will incur a one-time charge of $60 to $80 million in Q1 2025 from severance payments. Despite reductions, most affected employees will be paid through the end of April 2025.
'We must ensure we fund the right work, reduce duplicative efforts, and have a lean organizational structure that drives clarity, pace, and urgency,' Jordan said in the memo.
Jordan said the layoffs will help with the cost minimization and efficiency maximization priorities.
These layoffs are expected to save the company approximately $210 million in 2025 and approximately $300 million in 2026.
The layoffs mean Southwest will incur a one-time charge of between $60 million and $80 million in the first quarter of 2025.
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