Southwest Airlines: A Big Change in the Air

Southwest Airlines is making some big changes. They are saying goodbye to 1, 750 corporate workers. That's about 15% of their corporate staff. This is a big deal for a company that has over 72, 000 full-time or full-time equivalent workers. The CEO, Bob Jordan, said it was a tough decision. He knows it's hard to say goodbye to people who have been a big part of the company's success. The airline has been facing some challenges. They've been dealing with rising labor costs. This is despite a hiring pause on management, headquarters jobs, and outside workers. Southwest had already offered buyouts to workers at 18 airports. But now, they're making even bigger changes. They're calling it the largest and most comprehensive transformation in the company's history. This includes things like adding assigned seats and selling and leasing back some of its aircraft. Southwest has always been different. For 50 years, they never laid off or furloughed employees. This made them popular with both employees and passengers. But now, they're under pressure from Wall Street. An activist investor, Elliott Investment Management, has been pushing for changes. After a heated showdown, Southwest agreed to add five Elliott-appointed board members. Elliott has been calling for change at the airline amid accusations of poor management and lackluster financial results. The airline is also changing some of its signature policies. They've added assigned seating and brought redeye flights to some routes. The CEO, Bob Jordan, said that the growth of their leadership and non-contract functions have outpaced their operation's growth for many years. Now, they need to become more lean, efficient, and agile to better serve their frontline employees and customers. The layoffs won't start until April. But affected employees will receive their salary and benefits until then. They just won't be working. This is a big change for Southwest. But it's a change they think they need to make to stay competitive. It's a tough decision, but it's one they think is necessary for the future of the company.