Southwest Airlines is taking measures to cut costs and improve its financial performance, including pausing corporate hiring and promotions, suspending most of its summer internships, and canceling some employee team-building events.
The airline’s CEO, Bob Jordan, sent a note to staff on Monday, saying that “every single dollar matters as we continue to fight to return to excellent financial performance.” The company will delay other activities “when it makes sense,” he added.
Southwest is also suspending its employee “rallies,” a long-standing tradition that dates back to 1985, where staff gather to hear from the airline’s leaders and enjoy food and entertainment. The airline is taking a cost-cutting measure that is a departure from its usual efforts to boost employee morale.
The airline’s decision is a response to challenges it faced last year, including pressure from activist investors, Elliott Investment Management, which called for a CEO change. The two sides reached a settlement in October, with Elliott winning five board seats, but Southwestern Airlines retaining its CEO.
Despite making progress in 2024, the airline’s CEO remains concerned about its financial performance, saying it is still far from its goal of returning to industry-leading profit margins. To achieve this, the airline has outlined a plan to increase profits through measures such as adopting assigned seating, reducing unprofitable routes, and flying overnight flights.
Southwest is scheduled to report its fourth-quarter results on January 30, and its shares have risen 14% over the past 12 months, trailing behind its major rivals, United, Delta, and American Airlines.