Throughout its more than 50 years of history, Southwest Airlines (NYSE: LUV), founded in 1967, has never fired an employee, until, perhaps, today.
In a communication to employees on Monday, Southwest CEO Gary Kelly warned employees that due to the recession in general, and the drop in air travel traffic in the coronavirus era in particular, it is likely the company conduct its first round of involuntary layoffs. “The recent increase in Covid cases and increases in regional restrictions on companies and states requiring quarantine are not positive developments for our business,” said the CEO. Across the industry, air traffic has decreased approximately 73% from pre-crown levels. And consequently, while “permits and layoffs remain our last resort, we cannot rule them out as a possibility in this really bad environment,” Kelly said.
Image source: Getty Images.
Hoping for the best, but advising her employees to prepare for the worst, Kelly urged workers to request “voluntary separation” or “extended time off” to help Southwest reduce its costs and avoid the need for resort to involuntary layoffs, Bloomberg reported. today. Otherwise, the company will move to consider cutting wages and benefits.
And failing thatIt seems like only one thing could save Southwest from ruining a more than half-century record of keeping workers on the payroll through thick and thin: “We need a significant recovery by the end of this year … approximately triple the number of passengers where we are today, “said the CEO.
As that seems unlikely to happen, the only logical conclusion is that after 53 years, the layoffs are finally reaching the southwest.
