Southwest Airlines will avoid layoffs and pay rate cuts of its employees through the end of this year, despite a difficult financial situation resulting from the coronavirus pandemic.
“Up front, I want you all to know we will not furlough or lay off any Southwest employees on Oct. 1, unlike our major competitors,” Southwest CEO Gary Kelly told staff in a memo last week. The Dallas-based airline has never had mass layoffs in its 49 year history. Kelly said he could not promise that there will be no layoffs in 2021. “I can promise you it will be the last thing we do to keep Southwest financially healthy and viable.”
Nearly 17,000 of 61,000 Southwest employees have applied for the voluntary separation scheme or the extended time-off programs, in order to avoid the need for payroll cuts when CARES, the U.S. government’s support program, expires on October 1. 4,400 of the 17,000 employees will leave the company permanently. The other 12,500 workers are on short-term or extended temporary leaves of absence.