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A Southwest Airlines Boeing 737 airliner taxis onto the runway at Ronald Reagan Washington National Airport (DCA) in Arlington, Virginia, on Dec. 13, 2024.
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Southwest Airlines is pausing corporate hiring and promotions, suspending most of its summer internships and doing away with some team-building events for employees dating back to the 1980s to cut costs and improve margins, CEO Bob Jordan said to the staff.
“Every dollar matters as we continue to fight to return to excellent financial performance,” Jordan said in Monday’s note, seen by CNBC.
He said the company will delay 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,” he said in an email.
As part of the cost cuts, Southwest is pausing its employee “rallies,” a company team-building tradition dating back to 1985 in which staff hear from airline leaders about the year’s goals and receive food and entertainment.
Southwest spent months last year under pressure from activist Elliott Investment Management, which called for a CEO change at the airline. He two sides resolved In October, Elliott gained five seats on Southwest’s board of directors, without control, and Jordan remained in the top position.
“We’ve made a lot of progress in 2024 and have a lot of tangible momentum… but we’re still far from our goal of returning to industry-leading profit margins,” Jordan wrote. “A key risk in 2025 is acting as if the urgency has passed and therefore not maintaining the focus and energy of 2024.”
Last year, the airline outlined a plan to increase profits that includes abandoning its more than 50-year-old open seating model in favor of assigned seating and creating a section with extra legroom, flying at night and more aggressively reducing unprofitable routes.
In September, the company cut off their flights of Atlanta, eliminating jobs, although personnel were able to apply to work at other bases.
Southwest is scheduled to report fourth-quarter results on Jan. 30. The airline’s shares are up 14% in the last 12 months, while Unitedhave risen more than 160% and the shares of Delta Airlines and american airlines they have gained around 70% and 33%, respectively.
