Southwest Airlines is implementing cost-saving measures by temporarily halting hiring, internships, and employee events. The move comes amid pressure from hedge fund Elliott for improved financial performance and operational efficiency.
Southwest Airlines is temporarily halting certain hiring activities, internships, and employee events as part of a cost-cutting strategy. The airline announced on Tuesday that it is pausing most summer internship positions, while honoring existing offers. Additionally, all non-contract internal and external hiring has been put on hold. The company stated that they are limiting discretionary costs, including canceling the Southwest Rallies for this year, to focus on reducing expenses.
Southwest Airlines intends to continually assess its hiring needs and determine the most appropriate time to resume hiring activities. This decision comes after the airline faced pressure from hedge fund Elliott, led by billionaire investor Paul Singer. In October, Southwest agreed to revamp its board and announced the retirement of its chairman in 2025, following Elliott's acquisition of a minority stake and calls for changes to enhance the company's financial performance and stock price. Elliott had previously advocated for a more aggressive approach to cost-cutting and operational efficiency. The airline has been navigating a challenging environment since the pandemic, experiencing a decline in profitability compared to its pre-pandemic levels. While Southwest remains more profitable than American Airlines, it lags behind Delta Air Lines and United Airlines in terms of financial performance. In recent years, Southwest has faced increased competition from low-cost carriers and has implemented several changes to adapt, including ending the practice of allowing passengers to choose their seats after boarding and exploring partnerships with international airlines to expand its route network
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