Southwest Airlines Co. said 28% of its workforce has agreed to leave the company permanently or temporarily, boosting the carrier’s effort to preserve cash.
About 4,400 employees have elected to exit Southwest for good and their applications will all be accepted, Chief Executive Officer Gary Kelly said Monday. In addition, almost 12,500 have signed up for extended “emergency time off” and Southwest will determine soon how many of them can be granted leave based upon the company’s operational needs.
Southwest is trying to avoid the first involuntary job cuts in its 49-year history amid a plunge in demand for flights because of the coronavirus pandemic. Kelly warned last week that passenger numbers would have to triple by year-end to eliminate the need for layoffs. The airline deferred comment on the impact that the voluntary programs might have on the need to cut jobs until it reports earnings Thursday.
Separately, the Dallas-based company has filed paperwork for a U.S. government loan as provided for under the $2 trillion Cares Act and will decide whether to access the funds by Sept. 30. Southwest is doing everything it can to preserve cash and remains hopeful it can avoid borrowing from the government, Kelly said.
The airline has received about $3.2 billion from U.S. taxpayers to help cover payroll costs through Sept. 30.
Southwest slid 3.2% to $33.03 at 11:26 a.m. in New York. The stock had dropped 37% this year through July 17, while a Standard & Poor’s index of the five biggest U.S. stocks tumbled 51%.
