Southwest to lay off 15% of its corporate staff, including senior leadership

Southwest Airlines said Monday it will cut 15% of its corporate workforce, or 1,750 people — the first mass layoffs in the company’s history.

The cuts will start in April and include senior leadership, the company announced. Eleven senior leadership positions, which include vice presidents and above, will be eliminated.

Southwest said it expects the layoffs will save the company $210 million this year and $300 million in 2026. It expects a one-time charge between $60 million to $80 million for costs such as severance.

“As we continue to work together to transform our Company, an area of intense focus will be maximizing efficiencies and minimizing costs,” Southwest CEO Bob Jordan said in a note to employees Monday. Jordan called the layoffs “a very difficult and monumental shift.”

Southwest has had a chaotic few years. Activist investors pointed out last year that the carrier’s share price was down more than 50% from early 2021. It exceeded analyst expectations in its latest earnings released in January but that was because of rising airfares.

In June 2024, hedge fund Elliott Investment Management took a $1.9 billion stake in the carrier, calling for a leadership and operations overhaul a few months later.

The company started the year with a new chief financial officer, Tom Doxey, who most recently was president of Breeze Airways. Southwest’s previous chief financial officer Tammy Romo and chief administration officer Linda Rutherford will retire from their positions in April 2025.

The shakeup goes beyond corporate leadership. Elliott Investment also pushed for changes that led to the reversal of the airline’s open seating policy to assigned seats. Assigned seating allows the airline to charge more for premium seats.

Southwest took a financial hit after an operational meltdown caused 16,700 flights to be canceled in late December’s busy holiday travel week. The airline’s employees blamed antiquated staff scheduling software that made its operations difficult to recover from seasonal bad weather.

As recently as 2021, the company had boasted of never having layoffs.

“It all leads up to a strong desire to take great care of our people and then, in turn, our customers. That’s why we’ve never had a layoff,” former CEO Gary Kelly said in a 2021 interview on Yahoo Finance.