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Southwest Airlines Halts Hiring and Summer Internships to Reduce Costs

By:

Pilotcenter.net

Southwest Airlines has decided to halt corporate hiring and promotions, as well as suspend most of its summer internships in a bid to streamline operations and enhance profitability. CEO Bob Jordan emphasized the importance of prudent financial management, stating, "Every single dollar matters as we continue to navigate our path back to financial prosperity." These cost-cutting measures were detailed in a memo to employees dated January 13, 2025, as shared with Pilotcenter.net News.

The company's spokesperson reaffirmed the decision in an email to Pilotcenter.net News the following day, underscoring the airline's ongoing evaluation of hiring requirements to determine when it is conducive for the business to resume recruitment activities. In addition to these adjustments, Southwest Airlines will also be postponing its traditional employee 'rallies', a longstanding team-building event established over four decades.

Despite notable progress in 2024, Jordan acknowledged that there is still ground to cover before achieving their target of leading the industry in profit margins. These strategic alterations come in the wake of a settlement with activist investor Elliott Management, which holds a substantial 11% stake in the airline. Elliott Management had voiced discontent with Southwest's three-year "transformational plan" unveiled in September 2024, scrapping the proposal due to its perceived prolonged timeline and accusing Jordan of being careless with shareholders' investments.

Subsequent to Elliott Management's objections, a proposal for new leadership and board remodelling was put forward in October 2024, advocating for increased independence and diversity amongst the board members. Ultimately, a resolution was reached that maintained Jordan at the helm of Southwest Airlines, while incorporating six new independent directors as part of the compromise.

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