Southwest Airlines is taking steps to address overstaffing issues at certain airports by offering buyouts and extended leaves of absence to airport workers. This move is attributed to a shortage of new planes from Boeing, which has impacted the airline's operations.
The buyout offers are limited to 18 airports, with targeted jobs in ground operations such as customer service agents, baggage handlers, and cargo workers. Pilots and flight attendants are not included in the voluntary separation program.
Southwest aims to reduce its workforce by 2,000 employees by the end of the year, following a period of growth that saw the company's employee count rise from 66,600 to nearly 75,000 in the previous year.
The airline's fleet consists solely of Boeing 737s, including the Max and older versions of the plane. However, production problems at Boeing have led to delays in aircraft deliveries, with Southwest now expecting only 20 new jets instead of the originally planned 85 for this year.
Southwest's financial performance has come under scrutiny, prompting hedge fund Elliott Investment Management to acquire an 11% stake in the airline. While Southwest and Elliott reached a truce to avoid a proxy fight, the hedge fund now holds several seats on the Southwest board, allowing it to exert influence on the company's leadership.
Prior to Elliott's involvement, Southwest had already implemented cost-saving measures such as limiting hiring, discontinuing service to certain airports, and focusing on attracting premium travelers. Despite these challenges, Southwest's stock price has seen a modest increase, rising 3% on Monday and 13% year-to-date, although lagging behind competitors like Delta Air Lines and United Airlines.
