Southwest Airlines is set to cut approximately 1,750 jobs in leadership roles, marking the first layoffs in its history as part of a cost-cutting strategy. The airline announced on Monday that the reductions will affect 15% of corporate positions, including senior leadership and directors, with the process beginning in late April and expected to be largely completed by the end of the second quarter.
CEO Bob Jordan described the decision as a “difficult and monumental shift” in a letter to employees, explaining that the company’s leadership and noncontract workforce had expanded beyond the airline’s operational growth for years.
The job cuts add to the ongoing challenges Southwest has faced over the past year, including pressure from activist investor Elliott Investment Management, leadership changes, and strategic shifts. The airline is moving away from its traditional one-size-fits-all business model, introducing premium seating and additional legroom, and recently launching redeye flights.
Southwest has long prided itself on avoiding involuntary layoffs in its more than 50-year history but has taken steps to manage workforce size. The company recently paused hiring for management and headquarters positions, halted pilot and flight attendant recruitment in 2023, and offered voluntary buyouts or extended leaves to airport staff in 18 cities, including Los Angeles and Atlanta. Additionally, its finance chief and chief administrative officer recently announced their retirements.
Despite the announcement, Southwest’s stock dipped by less than 1% in early trading on Tuesday and had already fallen 9.9% this year as of February 14, compared to a 4% gain in the S&P 500 Index.
The airline’s expansion during the pandemic, which added 18 cities to its network, was based on expectations of post-pandemic growth. However, rising costs, delays in aircraft deliveries from Boeing, and revised expansion plans led to a scaled-back growth strategy, with Southwest planning a modest 1-2% annual capacity increase through 2027.
While some attribute the layoffs to pressure from Elliott Investment Management, analysts suggest that Southwest had been considering operational adjustments even before Elliott’s involvement, acknowledging that its organization had become too large.
Beyond cost savings, the layoffs could impact Southwest’s renowned workplace culture, which has been central to its identity since co-founder Herb Kelleher emphasized that happy employees lead to satisfied customers and profitable operations. Unlike many competitors, Southwest historically avoided forced furloughs even after the 2001 terrorist attacks and during the COVID-19 pandemic, though employees sometimes had to relocate to retain their jobs.
Despite improving financial performance in the final quarter of 2024, Southwest warned on January 30 that rising costs—driven by inflation and expensive labor contracts—would outpace revenue growth. The airline expects to save $210 million in 2025 and $300 million in 2026 through these job cuts, though it will incur a one-time charge of $60 million to $80 million this quarter.
In his message to employees, Jordan emphasized the need for organizational changes to make Southwest more agile, stating, “We are building a leaner organization with increased clarity on what is most important.”
