Southwest Airlines is making its first mass layoffs in 53 years, cutting 1,750 corporate jobs to save costs amid rising labor expenses and investor pressure. Changes include hiring freezes, assigned seating, and premium options.
Southwest Airlines has announced its first mass layoffs in 53 years, cutting 1,750 corporate positions, including senior leadership roles, to create a leaner organization. This move aims to save $210 million in 2025 and $300 million in 2026. The decision follows pressure from activist investor Elliott Investment Management to reduce expenses. Despite avoiding broad layoffs during past economic hardships, Southwest faces rising labor costs due to new union agreements and inflationary pressures. The restructuring will not affect frontline employees. Southwest is also implementing changes to its business model, including assigned seating and extra legroom rows, aiming for higher revenue while slowing growth and optimizing operations. Other cost-saving measures include freezing hiring and promotions and selling and leasing back planes.