DALLAS – Southwest Airlines is offering buyouts and extended leave to airport workers to avoid so-called “overstaffing at certain locations,” which it blames on a shortage of new planes from Boeing.
Monday’s move comes as a hedge fund is under pressure Southwest to boost profits and boost the stock price, which has fallen sharply since the start of 2021.
A Southwest spokesperson said the “voluntary separation” offer is limited to 18 airports. The company declined to identify the airports or say how many jobs it hopes to cut.
All targeted jobs will be in ground operations, including customer service representatives, baggage handlers and cargo personnel. Pilots and flight attendants are not included in the buyout offer, the spokesperson said.
Southwest officials have said the Dallas-based airline plans to end this year with 2,000 fewer employees than it started. That’s after Southwest grew from 66,600 to nearly 75,000 employees last year. Part-timers count for half of the figures.
“Southwest has reduced overall capacity to meet demand with a limited fleet due to aircraft delivery delays,” the company said in a statement. “Offering voluntary separation and extended leave to contract and non-contract employees, along with continued hiring delays, will help us avoid overstaffing in certain locations.”
Southwest had originally expected about 85 new Boeing 737 planes this year, but cut that number to 20 because of production problems at Boeing that started after a panel blew out the side of an Alaska Airlines 737 Max during a flight in January.
The Southwest fleet consists exclusively of Boeing 737s, including the Max and older versions of the aircraft.
Starting in June, hedge fund Elliott Investment Management built an 11% stake in Southwest and pressured the airline to improve its financial performance. The two sides reached a ceasefire last month to avoid a proxy fight, but Elliott won several seats on Southwest’s board, which it can use to put pressure on CEO Robert Jordan and other executives.
Even before Elliott, Southwest limited hiring and stopped flying to several airports to save money. It also announced plans to do so target premium travelers.
Shares of Southwest rose 3% on Monday and are up 13% this year. That’s far behind Delta Air Lines’ 117% jump and United Airlines’ 58% gain.
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