Southwest CEO Says Airline ‘In Critical Care’ But Does Not Plan To Lay Off Or Layoff At This Time


  • Southwest Airlines CEO Gary Kelly in a letter to employees on Sunday said the airline “will not fire or fire any Southwest Airlines employee on October 1, unlike its competitors,” CNN reported.
  • The airline industry suffered during the COVID-19 pandemic with a significant decrease in air travel. and other airlines, such as United Airlines and American Airlines, have announced plans to lay off significant percentages of their workforce.
  • Airlines that have received funding under the CARES Act cannot lay off employees until September.
  • “Further, we have no intention of asking for any time off, layoffs, pay cuts or benefits at least until the end of this year,” Kelly wrote.
  • Visit the Business Insider homepage for more stories.

Southwest Airlines CEO Gary Kelly told employees in a letter on Sunday that the company will not lay off or lay off employees in October, as competing airlines have announced, CNN first reported. .

“Also, we have no intention of asking for any time off, layoffs, pay cuts or benefits at least until the end of this year,” Kelly wrote. “We have never had any in our 49 year history. ”

Nearly 17,000 employees in the Southwest have taken voluntary leave and extended their leave from the company, he wrote.

“I can’t guarantee this will never happen, especially during these dark times of the pandemic,” Kelly added of future layoffs. “I can promise you that this will be the last thing we do to keep the Southwest financially healthy and viable. ”

Kelly told employees Southwest has lost about $ 1.6 billion since the start of the year and is losing an additional $ 20 million every day. To compensate, he wrote the company scaled back projects, worked with the US government to raise $ 3.2 billion in funds through the CARES Act, sold $ 2.2 billion in company shares to investors. and borrowed more than $ 12 million from lenders “through the sale and leaseback of aircraft.” . “

“Our business is in critical care,” Kelly said.

Southwest currently has 100 parked planes in stock, he wrote, adding that second-quarter travel was down 56% from this period in 2019.

The announcement comes amid a period of turbulence for the airline industry as a whole, which has seen a significant drop in passenger numbers due to the coronavirus pandemic, the effects of which could be felt for years to come. analysts warned.

Funding received by airlines under the March CARES law stipulated that companies that received funding could not lay off their employees until the end of September, as reported by CNN.

On July 15, American Airlines announced that it would warn 25,000 frontline workers – about 20% of the company’s workforce – of possible time off and layoffs, because it predicted that air travel would not recover when l The CARES law relief for airlines will expire on October 1. the profession most affected, with 37% of workers having received notifications, reported David Slotnick of Business Insider.

Earlier in July, United Airlines issued layoff and time off notices to 36,000 of its employees, including 15,000 flight attendants and 2,250 pilots, adding that it expected air travel to resume by 40% of the typical number by August and that she didn’t expect her to. increase during the rest of the year.

Kelly said Southwest currently had $ 14 billion “in the bank,” which is enough to cover the company’s losses for more than two years, he said.

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