Southwest Airlines Layoffs: Low-cost carrier cuts 15% corporate workforce. Here’s why

Dallas-based American low-cost carrier airline Southwest Airlines is laying off 1,750 people, which makes up for 15 per cent of the company's corporate workforce in an effort to save $210 million in 2025, reported the news agency AP on Tuesday, February 18. 

This is the company's first major layoff in 53 years. Southwest Airlines said that they would entirely focus the job cuts on the “corporate overhead and leadership positions,” which includes senior leadership and directors according to the agency report.

The report also highlighted that 11 senior leadership positions will be vacated, which would also represent 15 per cent of the company's senior management committee.

According to the report, the job cuts are scheduled to be completed by the end of June 2025 in an effort to reduce costs and turn the firm into a “leaner, faster, and more agile organization,” said chief executive officer (CEO) Bob Jordan cited in the agency report. 

“This decision is unprecedented in our 53-year history, and change requires that we make difficult decisions,” he said, as per the report.

The company will save nearly $210 million this year (2025 and close to $300 million in 2026, as per the report.

Southwest Airline Woes

The low-cost airline offered to buy out and extend leaves of absence to airport workers, including the customer service agents, baggage handlers and cargo workers, in a bid to avoid “overstaffing in certain locations,” in November 2024, as per the report.

The company is under pressure from the Elliott Investment Management hedge fund to boost the profits of the firm and the stock price. The stocks have dropped 9.9 per cent so far year-to-date, as per the agency report.

Southwest Airlines Co shares are trading 0.26 per cent lower as of 11:14 a.m. (EST) on the New York Stock Exchange on February 18.

The company and the hedge fund reached an agreement in October 2024, to avoid a proxy fight, but Elliott won multiple seats on the board of directors table which it can use to keep the pressure on the CEO and other key executives, according to the report.