Southwest Airlines has announced a temporary pause on hirings, internships, and employee events in an effort to reduce costs. The company stated that it is limiting discretionary expenses, including canceling Southwest Rallies for the year, pausing most summer internship positions while honoring existing offers, and halting all noncontract internal and external hiring.
The airline will continuously assess its hiring needs to determine the appropriate time to resume recruitment activities. This decision comes after Southwest's recent announcement of board revamp and the retirement of its chairman by 2025, following pressure from hedge fund Elliott Investment Management.
Elliott Investment Management, led by billionaire Paul Singer, acquired a minority stake in Southwest and advocated for changes to enhance the company's financial performance and stock value. A settlement was reached in October, resulting in the departure of Chairman Gary Kelly and six board members, who were replaced by five Elliott-backed candidates and a former Chevron executive.
Southwest Airlines, known for its profitability over five decades, faced challenges during the pandemic-induced decline in air travel in 2020. While the company remained more profitable than American Airlines, it lagged behind Delta Air Lines and United Airlines.
Originally a budget-friendly carrier operating from less congested secondary airports, Southwest now competes with major airlines at primary hubs. To boost revenue, the airline plans to convert a significant portion of its seats to premium with extra legroom, introduce assigned seating, and establish partnerships with international carriers like Icelandair for expanded travel options.
In response to overstaffing concerns in certain locations due to delayed Boeing plane deliveries, Southwest offered buyouts and extended leaves to airport workers in November. Despite these challenges, the airline's shares saw a slight increase in morning trading.
