DALLAS – Southwest Airlines is offering buyouts and extended leaves of absence to airport workers to avoid what it calls “overstaffing in certain locations,” which it blames on a shortage of new planes from Boeing.
The move on Monday comes as a hedge fund presses Southwest to increase profits and boost the stock price, which has fallen sharply since early 2021.
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A Southwest spokesperson said the offers of “voluntary separation” are limited to 18 airports. The company declined to identify the airports or say how many jobs it hopes to eliminate.
All the targeted jobs are in ground operations, including customer service agents, baggage handlers and cargo workers. Pilots and flight attendants are not included in the buyout offer, the spokesperson said.
Southwest officials have said that the Dallas-based airline plans to end this year with 2,000 fewer workers than it started. That is after Southwest grew from 66,600 to nearly 75,000 employees last year. The figures count part-timers as one-half.
“Southwest has reduced overall capacity to meet demand with a constrained fleet due to aircraft delivery delays,” the company said in a statement. “Offering voluntary separation and extended time off to contract and noncontract employees, along with continued slowed hiring, will help us avert overstaffing in certain locations.”
Southwest had originally expected about 85 new Boeing 737 jets this year but has cut that number to 20 because of production problems at Boeing that began after a panel blew out of the side of an Alaska Airlines 737 Max during a flight in January.
The Southwest fleet consists solely of Boeing 737s, including the Max and older versions of the plane.
Starting in June, hedge fund Elliott Investment Management built an 11% stake in Southwest and pressed the airline to improve its financial performance. The two sides reached a truce last month to avoid a proxy fight, but Elliott won several seats on the Southwest board, which it can use to keep pressure on CEO Robert Jordan and other executives.
Even before Elliott, Southwest limited hiring and stopped flying to several airports to save money. It also announced plans to target premium travelers.
Southwest shares rose 3% Monday and are up 13% this year. That is far behind the 117% jump at Delta Air Lines and the 58% gain at United Airlines.