American Airlines plans 30% reduction in management and administrative staff

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American Airlines plans to cut 30% of its management and support staff, a reduction of about 5,000 jobs, due to the toll the coronavirus charges, the company said on Wednesday.

The airline has also started offering buyouts to these employees and has said it plans to offer new voluntary leaves and buyouts for front-line staff, such as flight attendants, next month, according to a note from service published by CNBC.

“Although our pre-pandemic liquidity, the significant financial assistance provided by the government and the liquidity that we have raised in the financial markets provide a basis for stability, we must reduce our cost structure, including our most critical expenses.” important – the cost of compensation and benefits, “said Elise Eberwein, US Executive Vice President for People and Global Engagement, in the staff note.

US airlines and others are struggling to cut costs due to the devastating pandemic on travel demand, which has driven them to their first losses in years. While more travelers are taking off in recent weeks than last month, demand is still down more than 80% from a year ago.

Airline executives said they plan to decrease due to weak demand, which has also prompted them to park hundreds of airliners, cut routes and urge employees to take voluntary leave unpaid or partially paid and, in some cases, to take early retirement.

“In addition, running a smaller airline means we will need a management and support team that is about 30% lighter,” wrote Eberwein.

Management and support staff will have until the end of June 10 to request the buyout, and American will offer volunteers one-third of their salary until the end of 2020 and five years of travel privileges. Employees who are laid off after October 1 will not receive severance pay, according to another memo read by CNBC.

American had approximately 130,000 employees at the end of 2019 and to date approximately 39,000 have taken voluntary leave or early retirement.

Airlines began receiving parts of a $ 25 billion federal aid package for airlines last month. Airlines that have accepted the aid are prohibited from dismissing or reducing employee rates of pay until September 30.

“There is no doubt that this is going to be a painful time for everyone, especially our departing colleagues, who have given everything to American Airlines and are leaving without any fault on their part,” said Eberwein. “They deserve our respect and our gratitude. Above all, they owe our renewed commitment and our collective efforts to bring Americans back to profitability and growth as quickly as possible. “

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