A Southwest Airlines Boeing 737 airliner drives along the runway at Ronald Reagan Washington National Airport (DCA) in Arlington, Virginia on December 13, 2024.
Daniel Slim | AFP | Getty Images
Southwest Airlines The company has temporarily halted corporate hiring and promotions, suspended most summer training programs and eliminated some employee team-building events dating back to the 1980s in order to cut costs and improve margins, CEO Bob Jordan told employees.
“Every dollar matters as we continue to struggle to return to excellent financial performance,” Jordan said in the memo, seen by CNBC.
He said the company would postpone other activities “when it makes sense.”
A Southwest spokeswoman confirmed the changes.
“We will continue to evaluate hiring needs on an ongoing basis to determine when it makes sense for the company to resume hiring,” she said in an email.
As part of the cost cuts, Southwest is temporarily pausing its employee “walks,” a corporate team-building tradition dating back to 1985 in which employees hear from the airline's leaders about goals for the year and get food and entertainment.
Southwest spent months last year under pressure from activist Elliott Investment Management, who called for a CEO change at the carrier. the Both sides settled down In October, Elliott won five seats on Southwest's board of directors, without control, and Jordan remained in the top job.
“We have made a lot of progress in 2024, and have a lot of tangible momentum… but we are still far from our goal of returning to industry-leading profit margins,” Jordan wrote. “The main risk in 2025 is to act as if the urgency has passed, and thus not maintain focus and energy from 2024.”
Last year the airline charted a Plan to increase profits This includes ditching the more than 50-year-old open-seat model in favor of assigned seating, creating a section with extra legroom, flying night flights, and cutting back on unprofitable routes more aggressively.
In September the company It reduced its flights from Atlanta, eliminating jobs, although employees were able to apply to work from other bases.
Southwest is scheduled to report fourth-quarter results on January 30. The carrier's shares have risen 14% over the past 12 months, while unitedIts shares rose more than 160% Delta Airlines and American Airlines By 70% and 33%, respectively.
