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A Southwest Airlines Boeing 737 passenger plane taxis onto the runway at Ronald Reagan Washington National Airport (DCA) in Arlington, Virginia on December 13, 2024.
Daniel Slim | Afp | Getty Images
Southwest Airlines is suspending corporate hiring and promotions, suspending most of its summer internships and doing without some team-building activities for employees that date back to the 1980s to cut costs and improve margins, CEO Bob Jordan told employees.
“Every dollar counts as we continue to fight to return to strong financial performance,” Jordan said in a Monday memo seen by CNBC.
He said the company would postpone other events “if it makes sense.”
A spokeswoman for Southwest confirmed the change.
“We will continue to continually assess hiring needs to determine when it makes sense for the company to resume hiring,” she said in an email.
As part of the cost-cutting effort, Southwest is suspending its employee “rallys,” a company-wide team-building tradition dating back to 1985 in which employees hear from airline executives about their goals for the year and are treated to food and entertainment.
Southwest spent several months last year under pressure from activist Elliott Investment Management, which called for a change in the company’s CEO. The the two parties settled in October, when Elliott won five southwest council seats, missing control, and Jordan remained in the top job.
“We’ve made significant progress in 2024 and have a lot of tangible momentum … but we’re still a long way from our goal of returning to industry-leading profitability,” Jordan wrote. “The main risk in 2025 is to act as if the urgency has passed and therefore not sustain the focus and energy from 2024.”
Last year, the airline planned a plan to increase profits this includes abandoning the more than 50-year-old open-seat model in favor of assigned seats and creating a section with extra legroom, night flights and more aggressively cutting loss-making routes.
In September, the company named after reduced his flights from Atlanta, eliminating jobs, although employees were able to apply for jobs from other bases.
Southwest is scheduled to report fourth-quarter results on Jan. 30. Over the past 12 months, the carrier’s shares have risen by 14%, while United‘s rose more than 160% and shares in the Delta Air Lines and American Airlines scored about 70% and 33%, respectively.
