Southwest to lay off 15% of corporate staff in cost-cutting effort

Core Points - Southwest Airlines is cutting 15% of its corporate workforce, affecting 1,750 jobs, to reduce overhead costs and become a "leaner" company [1][3] - The layoffs will primarily impact corporate overhead and leadership positions, including 11 senior leadership roles [1] - The company aims to save approximately $210 million in fiscal year 2025 and$300 million in fiscal year 2026 as a result of these layoffs [3] Cost-Cutting Measures - Most separations are expected to be completed by the end of the second fiscal quarter, with an anticipated cost of $60 million to$80 million related to severance payments in the first quarter of fiscal year 2025 [3] - Southwest has paused certain corporate events, hiring, and most summer internships to limit discretionary spending [5] - The airline is implementing a multi-year plan to improve finances, targeting a $500 million run rate in savings by 2027 [7] Strategic Changes - CEO Bob Jordan emphasized the importance of financial performance and stated that "every single dollar matters" in the company's transformation efforts [6] - The airline plans to introduce significant changes, including assigned seating, an evolved boarding process, and premium seating options [8] - Southwest will also start operating red-eye flights in February to maximize aircraft utilization and reduce turnaround time [8] Investor Influence - The company's cost-cutting measures follow a$2 billion stake taken by activist investor Elliott Investment Management, which has called for leadership changes to enhance financial performance [4]