A Southwest Airlines Boeing 737 passenger jet taxis down the runway at Ronald Reagan Washington National Airport (DCA) in Arlington, Virginia on December 13, 2024.
Daniel Slim | AFP | Getty Images
Southwest Airlines is pausing corporate hiring and promotions, suspending most of its summer internships and doing away with some team-building events dating back to the 1980s to cut costs and improve margins, CEO Bob Jordan told staff.
“Every dollar counts as we continue to fight to return to excellent financial results,” Jordan said in a Monday note, 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 continually evaluate hiring needs to determine when it makes sense for the company to continue hiring,” she said in an email.
As part of the cost-cutting, Southwest is pausing its employee “huddles,” a company team-building tradition dating back to 1985 in which staff hear from airline executives about goals for the year and are treated to food and entertainment.
Southwest spent months last year under pressure from activist Elliott Investment Management, which sought a CEO change at the carrier. The two parties settled in October with Elliott winning five seats on the Southwest board, without control, and Jordan remaining in first place.
“We’ve made great progress in 2024 and have plenty of tangible momentum … but we’re still a long way from our goal of returning to industry-leading profit margins,” Jordan wrote. “The key risk in 2025 is to act as if the urgency has passed and therefore not maintain the focus and energy of 2024.”
Last year, the airline charted a a plan to increase profits these include ditching the more than 50-year-old open-seat model in favor of assigned seats and creating sections with extra legroom, overnight flights and more aggressive cuts to unprofitable routes.
In September, the company cut his flights short from Atlanta, eliminating positions, although personnel could apply to work out of other bases.
Southwest is scheduled to report fourth-quarter results on Jan. 30. Shares of the carrier rose by 14% in the last 12 months, while Unitedhave grown by more than 160%, and shares in Delta Air Lines and American Airlines they got about 70% and 33%, respectively.
