Southwest ramps up layoff warning with notices on 6,828 jobs

Southwest Airlines Co. dramatically expanded its furlough warnings, telling employees that 6,828 jobs are at risk as the company and its labor unions have failed so far to agree on how to cut $500 million in costs.

Pilots, flight attendants, baggage handlers and other workers got notices Thursday that they may be furloughed, Southwest said. The new warnings boosts the number of people at risk of being cut between January and April 1 to 7,273, or nearly 13% of the workforce.

Southwest’s inability to secure a 10% reduction in 2021 spending for each work group means the company is on the brink of its first involuntary job cuts in its 49-year history. With travel demand languishing at about 40% of last year’s levels, the airline says it has 20% more employees than it needs—at an expected cost next year of $1 billion.

“Due to a lack of meaningful progress in negotiations, we had to proceed with issuing notifications to employees who are valued members of the Southwest family,” Russell McCrady, vice president of labor relations, said in a statement. “We are willing to continue negotiations quickly to preserve jobs if we can achieve the support that allows Southwest to combat the ongoing economic challenges created by the decline in demand for air travel.”

Cash Burn

It’s the third time in four weeks that Southwest has sent notices of potential layoffs. The earlier letters went to 445 mechanics, employees who manage parts inventory, technicians who clean aircraft and other workers. Talks began in October, with the goal of securing agreements by the end of that month. The carrier earlier reached deals with two small work groups.

The layoffs could be prevented if Congress approves a new financial stimulus package that includes additional financial aid to help cover airline payroll costs. Employees must be notified of potential furloughs as much as 90 days in advance.

Southwest has said it would burn as much as $11 million a day from October through December. The Dallas-based company reported a $1.2 billion adjusted loss in the third quarter.

Since seniority provisions for some unions mean Southwest can’t know which individuals ultimately will be let go, 7,990 workers got the latest notices that they could be affected. Workers getting warnings included 2,551 ramp workers, 1,500 flight attendants and 1,221 pilots.

About 17,000 employees already have left Southwest temporarily or permanently through voluntary programs.