Southwest Airlines is pausing corporate hiring and promotions, suspending most of its summer internships and going without some employee team-building events that date back to the 1980s in order to cut costs and improve margins, CEO Bob Jordan told staff.<\/p>\n
\u201cEvery single dollar matters as we continue to fight to return to excellent financial performance,\u201d Jordan said in the note Monday, which was seen by CNBC.<\/p>\n
He said the company will delay other activities \u201cwhen it makes sense.\u201d<\/p>\n
A Southwest spokeswoman confirmed the changes.<\/p>\n
\u201cWe\u2019ll continue to evaluate hiring needs on an ongoing basis to determine when it makes sense for the business to resume hiring,\u201d she said in an email.<\/p>\n
As part of the cost cuts, Southwest is pausing its employee \u201crallies,\u201d a company team-building tradition that dates back to 1985 in which staff hear from the airline\u2019s leaders about the year\u2019s goals and are treated to food and entertainment.<\/p>\n
Southwest spent months last year under pressure from activist Elliott Investment Management, which called for a CEO change at the carrier. The two sides settled in October with Elliott winning five Southwest board seats, short of control, and Jordan remaining in the top job.<\/p>\n
\u201cWe made a lot of progress in 2024, and we have a lot of tangible momentum … but we\u2019re still far from our goal of returning to industry-leading profit margins,\u201d Jordan wrote. \u201cA key risk in 2025 is acting as if the urgency has passed and therefore not sustaining the focus and energy from 2024.\u201d<\/p>\n
The airline last year charted out a plan to increase profits that includes ditching its more than 50-year-old open seating model in favor of assigned seats and creating a section with extra legroom, flying overnight flights, and more aggressively cutting back unprofitable routes.<\/p>\n
In September, the company slashed its flights from Atlanta, eliminating jobs, though staff were able to apply to work out of other bases.<\/p>\n
Southwest is scheduled to report fourth-quarter results on Jan. 30. The carrier\u2019s shares are up 14% over the past 12 months, while United\u2019s are up more than 160% and shares in Delta Air Lines and American Airlines have gained about 70% and 33%, respectively.<\/p>\n<\/p>\n
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