Southwest Airlines is in the midst of a radical shakeup, the largest in the company’s 53 year history. The airline is getting many new “firsts” including assigned seating, extra legroom seating, and redeye flights as part of the changes. Now, it appears the Dallas based carrier is getting another first, its first ever layoffs are coming.
Layoffs hit Southwest Airlines
Historically, Southwest Airlines has had an absolutely fantastic corporate culture. It may have been old school, something activist investor Elliott Investment Management is looking to change, but it had heart; the Southwest logo is a nod to this spirit.
Today, the airline was shaken to its core as CEO Bob Jordan announced layoffs for more than 1,750 employees. Aviation insider xJonNYC posted the full text of Jordan’s memo which has been linked below.
— JonNYC (@xJonNYC) February 17, 2025
The memo notes that the vast majority of the layoffs will come in leadership and corporate positions. Flight crews, mechanics, and other departments responsible for the day to day operation of the airline appear to be safe for the time being.
While layoffs are never fun, I understand that they are part of the natural course of business, this one appears to be conducted in a way that is so contrary to Southwest’s corporate culture it’s making my head spin.
Southwest is locking employees out of its headquarters building tomorrow and asking them to work from home unless they are required to be onsite for operational or training purposed. Invites for virtual meetings will be sent to individual noncontract employees tomorrow morning to inform them of their fate at the company.
These separations will happen effective immediately but those affected will remain employed until late April. They will continue to receive their salary, benefits, and bonuses (if eligible) through that time
What Comes Next?
Tonight is an uncomfortable night for many Southwest Airlines employees as they wait to learn their fate. While the layoffs may be swift, the way that they are occurring will likely do significant damage within the organization. Herb Kelleher, the former CEO of Southwest famously said:
“Your employees come first. And if you treat your employees right, guess what? Your customers come back, and that makes your shareholders happy. Start with employees and the rest follows from that.”
While times have certainly changed since Kelleher was at the helm, the culture he instilled permeated throughout Southwest Airlines. While the approach for the layoffs seems harsh, maybe that’s the point.
Activist investor Elliott Investment Management has made it known that the carrier needs to boost profits and it intends to do that by radically changing what has made Southwest Southwest over the last fifty years. The company may be looking at this workforce reduction as an opportunity to change the underlying culture of the organization.
While these changes may be good for the bottom line, it may not be so great for passengers. Southwest has had some significant operational issues over the last few years but, I have always found their crews to be friendly. Sometimes excessively so, I don’t want to hear a stand up routine on a 6:00a flight to Tulsa.
Coincidentally, I’m flying Southwest for the first time in over a year later this week. I’ll be interested to see how the atmosphere onboard has changed since my last flight, which occurred prior to the activist investor getting involved.
Summary
Layoffs are hitting Southwest Airlines for the first time in its 53 year history. Corporate and leadership positions are impacted but operations and contracted employees will not be affected. This is such a radical corporate shift for Southwest and I wonder what impacts this will have down the road.
