Southwest Airlines is pausing corporate hiring and summer internships to cut costs amid pressure from an activist investor
Dallas: So, Southwest Airlines is hitting the brakes on hiring and summer internships. They’re doing this to save some cash after some serious pressure from an activist investor.
They’re also stopping their “Southwest Rallies,” which have been around since 1985. These events were all about team-building with free food and entertainment, where leaders shared the company’s vision.
CEO Bob Jordan sent a note to staff saying they’re pausing corporate hiring and internships. He emphasized that every dollar counts as they work to get back on solid financial ground.
Shares of the airline went up a bit, about 1%, on Tuesday morning. A spokesperson confirmed they’re cutting back on “discretionary costs” and will honor existing internship offers but pause new hiring.
They’ll keep checking their hiring needs to see when it makes sense to start again. Last year, Southwest had a tough time with activist investor Elliott Investment Management, which pushed for changes in leadership.
That feud wrapped up in October, allowing Jordan to stay as CEO, but Elliott got five board seats, which is a big win for them.
Southwest has been making a lot of changes to boost business, like switching from open seating to assigned seats and offering more ticket options. They even started overnight flights and cut back on some routes.
While these changes did lead to some job cuts, they let employees apply for positions at other bases. Over the past year, Southwest shares have gone up about 14%, but that’s slower than some competitors like United Airlines, which saw a nearly 170% increase.