Thursday, February 29, 2024

Southwest Airlines warns nearly 13% of workforce at risk of layoff after punitive year for travel

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Southwest Airlines Co. has dramatically expanded its vacation warnings, telling employees 6,828 jobs are at risk as the company and its unions have so far failed to agree on how to cut costs of $ 500 million.

Pilots, flight attendants, baggage handlers and other workers received notices Thursday that they may be on leave, Southwest said. The new warnings increase the number of people at risk of being cut between January and April to 7,273, or nearly 13% of the workforce.

Southwest’s inability to achieve a 10% reduction in 2021 spending for each task force means the company is on the verge of its first involuntary job cuts in its 49-year history. With coronavirus pandemic keeping travel demand at around 40% of last year’s levels, airline says it has 20% more employees than it needs – at an expected cost of $ 1 billion dollars next year.

“We are ready to move quickly to negotiations to preserve jobs if we can secure the support that allows Southwest to tackle current economic challenges,” Russell McCrady, vice president of labor relations, said in a courier statement. electronic.

The latest notices were the third batch in four weeks that Southwest has sent out a warning of potential layoffs. The first letters went to445 mechanics, employees who manage parts inventory, technicians who clean airplanes and other workers. Talks began in October with the aim of reaching deals by the end of the month. The carrier has previously made agreements with two small working groups.

“Scary tactic”

The airline is pushing for concessions despite recent progress towards a coronavirus vaccine, the move towards a possible extension of federal payroll assistance for carriers and the potential for increased passenger demand in the spring, said Jon Weaks, president of the Southwest Airlines Pilots Association.

“It’s just a scare tactic and a lot of revenge on their part,” he said in an interview. “We see him as a heartless negotiating stick in the eyes.” The union has no scheduled talks with Southwest, he said.

Employees who received notices on Thursday included 2,551 apron workers, 1,500 flight attendants and 1,221 pilots.

Southwest and theLocal transport workersrepresenting Ramp, Supply and Freight workers are around $ 10 million to hit the $ 70 million in reductions sought by the carrier, said Charles Cerf, chairman of the unit. The airline has refused to give the group a credit of $ 100 million of savings previously achieved through voluntary early retirement and long-term leave and has rejected other cost-cutting proposals, it said. he declares.

“We believe they are using this permission to try to intimidate unions,” Cerf said in an interview. The union is working with Southwest to start further negotiations. The TWU’s local chapter for flight attendants did not immediately respond to a request for comment.

Recovery plan

Layoffs could be avoided if Congress approves a newRecovery planwhich includes additional financial assistance to help cover airline salary costs. Employees should be notified of potential holidays up to 90 days in advance.

Southwest said it will burn up to $ 11 million a day from October through December. The Dallas-based company reported an adjusted third-quarter loss of $ 1.2 billion.

Since seniority provisions for some unions mean Southwest cannot know which people will ultimately be made redundant, 7,990 workers have received the latest notices indicating they may be affected. Approximately 17,000 employees have already left Southwest temporarily or permanently through voluntary programs.

Southwest rose 2.4% to $ 48.59 as of 2:48 p.m. in New York City. The stock had fallen 12% this year through Wednesday, the smallest drop in the S&P 500 Airlines index (updated with pilots union commentary in sixth paragraph)

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