By Teresa Rivas

Southwest Airlines is taking drastic steps as it tries to catch up to peers, slashing some 15% of its corporate workforce. The cuts mark the company's first-ever layoffs, a move it hopes will save it millions this year and next as it struggles with recent underperformance.

Late Monday, Southwest said it would eliminate about 1,750 jobs -- including 11 senior leadership roles -- effective in April. Front-line workers like pilots and flight attendants won't be part of the cuts. The company hopes the move will save $210 million in 2025 and $300 million in 2026.

Barron's noted last week that Southwest was making big changes as it grapples with multiple issues. Its stock lagged behind those of its highflying peers as recent tailwinds for carriers, like travel demand and newer fleets, have largely benefited the legacy airlines over discounters. In addition, it's fighting a government lawsuit related to delayed flights and activist investor Elliott Investment Management.

Nonetheless, the job cuts are a blow for Southwest: It had long been a point of pride for the company that it had never had involuntary layoffs -- even after industry flashpoints like 9/11 and Covid-19 -- and its distinct corporate culture helped it stand out among carriers.

Still, the writing was on the wall: The company already paused hiring for pilots and flight attendants in 2024, and did the same for management jobs last month. It's also moved away from other long-held Southwest-specific quirks, like its open-seating policy.

However recent troubles are evidence that changes may be necessary: Southwest shares have roughly halved from their 2021 highs and are off some 10% year to date.

Write to Teresa Rivas at teresa.rivas@barrons.com

This content was created by Barron's, which is operated by Dow Jones & Co. Barron's is published independently from Dow Jones Newswires and The Wall Street Journal.

(END) Dow Jones Newswires

February 17, 2025 18:41 ET (23:41 GMT)

Copyright (c) 2025 Dow Jones & Company, Inc.