In this article, Southwest Airlines is implementing cost-cutting measures to enhance margins. CEO Bob Jordan informed employees that the company is pausing corporate hiring and promotions, suspending most summer internships, and discontinuing employee team-building events from the 1980s. Jordan emphasized the importance of every dollar in striving for financial excellence.
The company plans to delay various activities as needed. A Southwest spokeswoman confirmed the changes and stated that hiring needs will be continually assessed to determine when it is feasible to resume hiring. As part of the cost-cutting efforts, Southwest is pausing its employee “rallies,” a tradition dating back to 1985 where staff receive updates on the airline’s goals and enjoy food and entertainment.
Southwest faced pressure from activist Elliott Investment Management last year, resulting in a settlement where Elliott gained board seats but fell short of control, with Jordan retaining his position. Jordan highlighted the progress made in 2024 but stressed the need to maintain focus and energy to achieve industry-leading profit margins.
The airline’s profit-increasing strategy includes transitioning from open seating to assigned seats, introducing a section with extra legroom, operating overnight flights, and reducing unprofitable routes. Last year, Southwest cut flights from Atlanta, leading to job losses, although affected staff could apply for positions at other bases.
Southwest is set to announce fourth-quarter results on Jan. 30. While Southwest’s shares have risen by 14% in the past year, United’s have surged by over 160%, and Delta Air Lines and American Airlines have seen increases of about 70% and 33%, respectively.
