Southwest Airlines announced on Thursday that it will lay off roughly 2,000 employees to cut costs after drastic first quarter losses. The company will also shutter its operations at four global airports.
Southwest and American Airlines experienced deep losses for the first quarter of 2024. Both blame delays in Boeing deliveries and soaring labor costs for their financial troubles.
Boeing’s inability to meet expectations for deliveries is keeping both carriers from adding more flights to their schedules. Meanwhile, U.S. travel demand continues to be high.
Southwest reported a $231 million loss, which CEO Bob Jordan called “disappointing.” He said that the company is focused on aspects of its business that it controls and will “adjust” for unmet aircraft delivery schedules.
This setback occurred despite operating revenue increasing 11% to $6.3 billion. The airline lost $159 million in the same period in 2023.
Jordan added that recent announcements of further delivery delays from Boeing will affect both 2024 and 2025.
✈️ Southwest Airlines exits multiple airports as Boeing troubles weigh
–https://t.co/q8d9lhAduh— DailyJobCuts . com – Layoffs / Job / Economy News (@dailyjobcuts) April 25, 2024
The number of airliners the company now believes it will receive from Boeing dropped drastically. Just weeks ago the expectation was for 46 new jets, but that number fell 57% to only 20.
Southwest planned to retire 49 aircraft from service this year, but that number also dropped to 35.
Its fleet by the end of 2024 will be approximately 802 aircraft.
The employee layoffs will come from its 74,000 workers, and hiring is also expected to slow. Southwest plans to offer voluntary time off programs as another way to cut costs.
Further, Southwest will cease operations at Cozumel International Airport in Mexico, Syracuse Hancock International Airport in New York, Bellingham International Airport in Washington state and George Bush Intercontinental Airport in Houston.
