By Alison Sider

Southwest Airlines is slated to shed 15% of its corporate workforce, eliminating about 1,750 jobs in an effort to cut costs and streamline the carrier's operations.

The cuts are a first for Southwest, which hadn't previously conducted a mass layoff in its 53-year history. They mark one of the most tangible signs of a shift in the airline's practices after a battle with activist investor Elliott Investment Management last year.

Even as rival airlines and companies across industries have culled staff in tough times, the company avoided broad job cuts during economic recessions, after the Sept. 11, 2001 terrorist attacks, and the Covid-19 pandemic. The track record has been a point of pride among executives, and Southwest has encouraged an irreverent culture with a fiercely loyal workforce.

But after a hiring spree in recent years, the airline -- long known for keeping costs down -- has been facing pressure from investors to rein in expenses. Even as travel appetite has surged, the airline's labor costs have increased due, in part, to new agreements with unions and other inflationary pressures have weighed on its profit margins. Chief Executive Bob Jordan said last month that corporate overhead has "grown at a faster rate than the rest of the airline" as it staffed up.

"We must ensure we fund the right work, reduce duplicative efforts, and have a lean organizational structure that drives clarity, pace, and urgency," Jordan wrote in a message to employees Monday, adding that he had arrived at the unprecedented decision "thoughtfully and carefully."

Write to Alison Sider at alison.sider@wsj.com

(END) Dow Jones Newswires

February 17, 2025 17:00 ET (22:00 GMT)

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