Here’s how Southwest’s CEO plans to cut costs and ‘conserve cash’
Southwest will announce options for employees to voluntarily separate from the company on June 1.
Southwest Airline’s chairman and CEO thanked employees for voluntarily taking time off during the coronavirus pandemic in a video message posted Thursday to the company’s website.
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The airline industry has been hit hard by the global public health crisis, with travel down an estimated 95 percent. Gary Kelly said it’s unrealistic to expect the industry to return to normal in six or 12 months, noting that it took years for airlines to recover after 9/11, and “this is far worse.”
While Southwest can’t control the pandemic, the economy, or customer demand, Kelly said the airline can take measures to cut spending and “conserve cash.” Southwest has offered employees leave without pay and time off without pay, as well a voluntary COVID-19 emergency time-off program, according to Kelly.
“I’m so impressed with how you’ve responded,” he said. “All told, approximately 21 percent of our active workforce is volunteering to take some form of time off or partial pay program.”
This month, more than 9,600 employees are taking emergency time off, Kelly said. In April, employees took more than half a million hours of leave without pay and time off without pay — the equivalent of about 3,000 employees taking off the entire month unpaid, he said.
“Thank you for making the most of these opportunities,” Kelly said.
Kelly said the company is finalizing voluntary separation packages and extended emergency time-off options to address overstaffing and will reveal more details on June 1.
“Know that we’re taking every action possible to protect the Southwest family and jobs,” he said. “But, remember, the imperative here is to ensure our company’s survival. Without that, there are no jobs.”
View Kelly’s entire message here.
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