Southwest's layoffs dent its worker-first culture

Southwest Airlines' first company-wide layoffs in its nearly 54-year history are aimed at shoring up profits, but they run the risk of undermining a company culture of putting employees first that made it stand out from rivals and cultivated a loyal fan base. Until this week, the U.S. carrier never resorted to mass layoffs and furloughs, even as the industry underwent crushing downturns. But soaring costs and sagging profits forced its hand on Monday to announce that it will slash 1,750 jobs, or 15% of its corporate workforce. Conor Cunningham, an analyst at Melius, said the layoffs go against the company's long-built culture, which he described as "the special sauce that makes everything possible." The layoffs also reflect a new reality at Southwest, where activist investor Elliott Investment Management's nominees currently hold five of 15 board seats and CEO Bob Jordan is under pressure to produce a fast turnaround. At meetings with Southwest's unions last year, Elliott had emphasized the need to "right-size" the company's headquarters, according to a person who attended the meeting. Jordan has outlined a strategy that seeks to lift Southwest's operating margin to at least 10% in 2027 from 2% last year. Robert Mann, a former airline executive who now runs a consulting firm, said the job cuts suggest there is a greater urgency to deliver on those goals. "It's a nod to the pressure that they're under from Elliott," Mann said. Elliott declined to comment. Southwest said while the layoff decision was "extremely difficult," it has tried to provide support and care to the affected employees.<br/>