Airline implements workforce reduction in
corporate and leadership roles
DALLAS, Feb. 17,
2025 /PRNewswire/ -- Southwest Airlines Co.
(NYSE: LUV) (the "Company") today announced a reduction in its
workforce to create a leaner and more agile organization as part of
the airline's transformational plan.
The workforce reduction of approximately 1,750 Employee roles is
focused almost entirely on corporate overhead and leadership
positions and represents approximately 15% of corporate positions,
including senior leadership and directors. Eleven senior leadership
positions (Vice President and above), also representing 15% of the
Company's senior management committee, will be eliminated as part
of this restructuring. Separations will be substantially complete
by the end of second quarter 2025.
"This decision is unprecedented in our 53-year history, and
change requires that we make difficult decisions. We are at a
pivotal moment as we transform Southwest Airlines into a leaner,
faster, and more agile organization," said Bob Jordan, President, Chief Executive Officer
& Vice Chairman of the Board of Directors. "I arrived at this
decision thoughtfully and carefully, knowing how hard it will be to
say goodbye to colleagues who have been a significant part of our
Southwest Culture and accomplishments. I'm grateful to all
Southwest Employees who have shared in our legendary history and to
those that will guide us into the next era of Southwest
Airlines."
As a result of this workforce reduction, the Company estimates
partial year 2025 savings to be approximately $210 million and full-year 2026 savings to be
approximately $300 million. These
savings exclude an expected one-time charge in first quarter 2025
in the range of $60 million to
$80 million, substantially all of
which is related to severance payments and post-employment
benefits, which the Company expects to treat as a special item.
One-time costs will vary based on specific Employee elections
during the workforce reduction. The Company will continue to report
on additional cost-savings actions as 2025
progresses.
Cautionary Statement Regarding Forward-Looking
Statements
This press release contains forward-looking statements within the
meaning of Section 27A of the Securities Act of 1933, as amended,
and Section 21E of the Securities Exchange Act of 1934, as amended.
Specific forward-looking statements include, without limitation,
statements related to (i) the Company's intentions to create a
leaner and more agile organization; (ii) the Company's expectations
with respect to its transformational plan; (iii) the Company's
estimates related to timing and number of separations, Employee
elections, one-time severance payments, and post-employment
benefits; (iv) the Company's expectations related to future cash
expenditures, including the factors and assumptions underlying the
Company's expectations; (v) the Company's expectations with respect
to savings associated with the reduction in workforce actions; and
(vi) the Company's financial and operational outlook, expectations,
goals, plans, targets, and projected results of operations, and
including factors and assumptions underlying the Company's
expectations and projections. These forward-looking statements are
based on the Company's current estimates, intentions, beliefs,
expectations, goals, strategies, and projections for the future and
are not guarantees of future performance. Forward-looking
statements involve risks, uncertainties, assumptions, and other
factors that are difficult to predict and that could cause actual
results to vary materially from those expressed in or indicated by
them. Factors include, among others, (i) the impact of fears or
actual outbreaks of diseases, extreme or severe weather and natural
disasters, actions of competitors (including, without limitation,
pricing, scheduling, capacity, and network decisions, and
consolidation and alliance activities), consumer perception,
economic conditions, banking conditions, fears or actual acts of
terrorism or war, sociodemographic trends, and other factors beyond
the Company's control, on consumer behavior and the Company's
results of operations and business decisions, plans, strategies,
and results; (ii) the Company's ability to timely and effectively
implement, transition, operate, and maintain the necessary
information technology systems and infrastructure to support its
operations and initiatives, including with respect to revenue
management and assigned and premium seating; (iii) the Company's
ability to obtain and maintain adequate infrastructure and
equipment to support its operations and initiatives; (iv) the
impact of fuel price changes, fuel price volatility, volatility of
commodities used by the Company for hedging jet fuel, and any
changes to the Company's fuel hedging strategies and positions, on
the Company's business plans and results of operations; (v) the
Company's dependence on The Boeing Company ("Boeing") and Boeing
suppliers with respect to the Company's aircraft deliveries, Boeing
MAX 7 aircraft certifications, fleet and capacity plans,
operations, maintenance, strategies, and goals; (vi) the Company's
dependence on the Federal Aviation Administration with respect to
safety approvals for the new cabin layout and the certification of
the Boeing MAX 7 aircraft; (vii) the Company's dependence on other
third parties, in particular with respect to its technology plans,
its plans and expectations related to revenue management,
operational reliability, fuel supply, maintenance, Global
Distribution Systems, environmental sustainability, and the impact
on the Company's operations and results of operations of any third
party delays or nonperformance; (viii) the Company's ability to
timely and effectively prioritize its initiatives and focus areas
and related expenditures; (ix) the impact of labor matters on the
Company's business decisions, plans, strategies, and results; (x)
the impact of governmental regulations and other governmental
actions on the Company's business plans, results, and operations;
(xi) the Company's dependence on its workforce, including its
ability to employ and retain sufficient numbers of qualified
Employees with appropriate skills and expertise to effectively and
efficiently maintain its operations and execute the Company's
plans, strategies, and initiatives; (xii) the cost and effects of
the actions of activist shareholders; and (xiii) other factors, as
described in the Company's filings with the Securities and Exchange
Commission, including the detailed factors discussed under the
heading "Risk Factors" in the Company's Annual Report on Form 10-K
for the fiscal year ended December
31, 2024.
ABOUT SOUTHWEST AIRLINES CO.
Southwest Airlines Co. operates one of the world's most
admired and awarded airlines, offering its one-of-a-kind value and
Hospitality at 117 airports across 11 countries. Southwest took
flight in 1971 to democratize the sky through friendly, reliable,
and low-cost air travel and now carries more air travelers flying
nonstop within the United States than any
other airline1. By empowering its more
than 72,0002 People to deliver unparalleled
Hospitality, the maverick airline cherishes a passionate loyalty
among more than 140 million Customers carried in 2024. Southwest
leverages a unique legacy and mission to serve communities around
the world including harnessing the power of its People and Purpose
to put communities at the Heart of its success. Learn more by
visiting Southwest.com/citizenship.
- Based on U.S. Dept. of Transportation quarterly Airline Origin
& Destination Survey since Q1 2021
- Fulltime-equivalent active Employees as of Dec. 31, 2024
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SOURCE Southwest Airlines Co.
