Southwest Airlines warns it could furlough 6,800 employees to cut costs

Southwest Airlines on Thursday said it could furlough more than 6,800 employees — about 12% of its staff — because of a “lack of meaningful progress” in cost-cutting negotiations with labor unions.

Southwest like other airlines has been struggling because of the coronavirus pandemic’s devastating impact on air travel demand. If Southwest moves ahead with job cuts, they would be the first involuntary furloughs in Southwest’s nearly 50 years of flying.

The Dallas-based airline has sent federally mandated notices advising workers their jobs could be at risk to 6,828 employees, including more than 1,200 pilots, 1,500 flight attendants, 1,110 customer service staff, and more than 2,500 ramp, cargo and other operation staff.

The furloughs would take effect either March 15 or April 1, or within two weeks of that date, the company said. Such furlough warning letters are generally given to workers 60 days ahead of a potential furlough and at least one union, representing the company’s pilots, dismissed the move as a negotiating tactic to pressure employees.

Southwest has asked labor groups to agree to pay cuts and other terms to avoid furloughs, which some unions have bristled at and argued the company did not consider their cost-cutting proposals such as partially-paid voluntary leave.

“Today marks a sad milestone in the history of Southwest Airlines,” Jon Weaks, president of the Southwest Airlines Pilots Association, the labor union that represents roughly 9,000 pilots at the carrier, said in a video message, which was seen by CNBC. “While this development is not completely surprising, it is incredibly disappointing to our pilots and their families.”