Southwest Airlines announced on Monday that it will lay off 15% of its corporate workforce, amounting to 1,750 employees. This marks the first major round of layoffs in the company’s history. The job cuts will begin in April and include senior leadership positions. Eleven senior leadership roles, including vice presidents and higher, will be eliminated.

The airline expects these layoffs to save $210 million this year and $300 million by 2026. However, it also anticipates a one-time charge of $60 million to $80 million to cover costs like severance.

Southwest CEO Bob Jordan addressed employees, calling the layoffs a “very difficult and monumental shift” and emphasized that maximizing efficiency and minimizing costs would be a key focus for the company moving forward.

Southwest Airlines has faced challenges over the past few years. Activist investors noted a significant drop in the airline’s stock price, which was down more than 50% since early 2021. Though the company exceeded earnings expectations in January, it was largely due to rising airfares.

In June 2024, Elliott Investment Management took a $1.9 billion stake in Southwest, urging a leadership and operational overhaul. This led to changes, including a reversal of the airline’s open seating policy in favor of assigned seats, which allows Southwest to charge more for premium seating.

The airline faced a financial setback following an operational meltdown in late December, which led to the cancellation of 16,700 flights during the busy holiday season. Employees attributed the disruption to outdated scheduling software that made it difficult to recover from bad weather.

As recently as 2021, Southwest had prided itself on not having any layoffs. Former CEO Gary Kelly had said in an interview that the company’s goal was always to take care of its people and customers, which was why it had avoided layoffs until now.

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