Southwest pauses some hiring and summer internships as the airline looks to reduce costs
Southwest Airlines said Tuesday that it would put the filling of some jobs and summer internships on hold this year as the company looks to lower costs.
The airline said it would honor internship offers already made but pause all “non-contract internal and external hiring.” Southwest said it would evaluate its staffing needs on an ongoing basis to determine when it made the most sense to restart hiring.
As part of the moves to limit “discretionary costs,” the company also does not plan to host the annual rallies where Southwest employees gather to celebrate past accomplishments and hear about future initiatives from corporate executives.
Southwest announced in September that it would revamp its board and that its chairman would retire in 2025, in a partial concession to hedge fund Elliott Investment Management, which has been pushing for changes at the airline.
Elliott, the fund led by billionaire investor Paul Singer, has built a minority stake in Southwest and advocated for changes it argued would improve the company’s financial performance and stock price.
The two sides reached a settlement in October. At the time, Southwest said that Chairman Gary Kelly and six board members would depart on Nov. 1 and be replaced by five Elliott-backed candidates and a former Chevron executive.
Southwest was a profit machine for its first 50 years — it never suffered a full-year loss until the pandemic crushed air travel in 2020. Since then, the company has been more profitable than American Airlines but far less so than Delta Air Lines and United Airlines.
Southwest was a scrappy upstart for much of its history. It operated out of less-crowded secondary airports where it could turn around arriving planes and take off quickly with a new set of passengers. It appealed to budget-conscious travelers by offering low fares and no fees for changing a reservation or checking up to two bags.
But Southwest now flies to many of the same big airports as its rivals. With the rise of “ultra-low-cost carriers,” it often gets undercut on price.
As part of its efforts to turnaround the business, Southwest has announced plans to increase revenue by converting nearly one-third of its seats to premium ones with extra legroom. It will also begin assigning seats — ending the longtime practice of letting passengers pick their own seats after boarding the plane. And it is pursuing partnerships with international airlines, starting with Icelandair, to offer destinations beyond North America and Central America.
In November the Dallas-based airline offered buyouts and extended leaves of absence to airport workers to avoid what it called “overstaffing in certain locations,” which it blamed on a shortage of new planes from Boeing.
Shares of Southwest rose slightly in morning trading.
By MICHELLE CHAPMAN
AP Business Writer
