United to cut management ranks by 30%

United expects to shrink its management and administrative ranks by at least 30% starting in October, according to a memo sent to employees Monday. That amounts to at least 3,450 people—the first indication of how many are likely to lose their jobs as United and other airlines grapple with a steep decline in air travel and an uncertain path to recovery. Airlines agreed not to lay off workers or cut pay rates through the end of September as a condition of receiving federal aid to cover salaries and benefits. United is receiving some $5b under that program. A United spokesman said the federal aid didn’t cover all the airline’s payroll expenses. “We anticipate spending billions of dollars more than we take in for the next several months, while continuing to employ 100% of our workforce. That’s not sustainable for any company,” he said. Employees affected by the reductions will be notified in mid-to-late July. United hasn’t said how many pilots, flight attendants, mechanics and other front-line employees it expects to cut or furlough. “Governmental restrictions on travel, stay-at-home orders, and the lack of a medical solution for COVID-19 have brought bookings and demand for travel basically to zero,” Kate Gebo, United’s executive VP of human resources, wrote in the memo to employees. “This is forcing us to come to terms with the fact that our airline—and our entire workforce—will have to be smaller than it is today.”<br/>