Southwest Layoff Memo Analysis
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Fifteen percent of Southwest Airlines, 1,750 will be laid off, and CEO Bob Jordan's message to staff (below) serves as a bad-news example for students to analyze.
Budget airlines, including JetBlue, have been struggling with costs, so the news shouldn’t be surprising to employees. During the December 2022 holiday storm when Southwest cancelled thousands of flights, a message asked employees to volunteer to help with scheduling; the company has been criticized for “outdated systems.” Increasing costs, competition, activist pressure led to a COO video message warning staff:
[W]e try everything before we can make difficult decisions. We have a couple of difficult decisions heading our way. It’s not station closures. But we need to keep moving the network to help us drive back to profitability. And so I apologize in advance if you as an individual are affected by it. But I hope you understand that as we make these things, it’s not, you know, without lots of efforts otherwise.
He doesn’t use the “L-word,” but employees should see, as the saying goes, “The writing on the wall.” This context is important as students assess whether the message meets communication objectives and is appropriate for the audience.
Here are a few points, assessing the memo against principles of bad-news messages:
The memo is on the Southwest website under Newsroom, a smart move because leaders can claim transparency—and it would likely would have been leaked, anyway, like the two messages I found linked above.
The news takes a while—no need to hold back when employees know what’s coming. The title, “Transforming The Way We Work,” means nothing (although is better than “Fork in the Road,” the most recent archived at opm.gov/fork). Employees will likely skim the first two paragraphs until they read the main point: cutting 15%, or 1,750 mostly Corporate and Leadership positions (some random capitalization throughout).
Mentioning the types of positions is critical and too often omitted from layoff memos. Isolate the group to provide (some) relief to those not affected.
Offering pay through April without work is generous (although it might further enrage investors who have been pushing for reductions—how can such a large group be immediately laid off without consequence?). He mentions severance, which could be spelled out here, as other leaders do, if it’s a generous package.
Jordan uses “I” when referring the decision (“I arrived at this decision after careful and thorough reflection”), taking responsibility, and demonstrates compassion in the next two paragraphs. He sounds sincere; few CEOs want to lay off staff.
I felt hopeful when I read the heading, “What to Expect,” but this is fluffy and doesn’t tell employees what they need to hear: Am I affected? When will I know? Instead, that paragraph is a company-pat-on-the-back—what they’re doing well. Other leaders are precise, for example, “Employees who are affected will receive an email immediately following this one, and will meet [in-person if possible] with . . . “).
Endings are always tricky, balancing how those leaving may feel with a positive statement about the company’s future, but this one feels harsh: “As we focus on delivering on our plan, our future will be built upon the actions we take today to ensure an even brighter future.” A departing employee might read this as, “You were dragging us down, so thanks for leaving. Your future is completely unknown, but we’ll be better off without you.” Or something like that.
The message could be signed by Jordan for a more personal touch at the end.
As posted on the site, it ends oddly with the boilerplate statement about the company’s history and number of employees, which probably didn’t appear in the original message to employees. The weird footnotes at the end are unnecessary, and the “2” needs to be superscript: “By empowering its more than 72,0002 People to deliver unparalleled Hospitality.” Minor points—but this detracts from the message, which should feel heart-felt, particularly for a company that refers to its employees as “Cohearts.”
Overall, I have certainly seen worse. It’s a terrible time for Southwest and has been for a while. The hope is that those laid off will find better jobs, although the job market is difficult. The best we can do is wish people well, including those staying, who might be part of an airline that will last.
Southwest Team:
We are at a pivotal moment as we carry out our three-year business plan to transform Southwest Airlines. Our transformational plan is the largest and most comprehensive in our 53-year history, and it focuses on three simple but powerful objectives. First, boost revenues and loyalty by offering our Customers the experience they want; second, maximize efficiencies and minimize costs; and third, make the most of our investments.
As we continue to work together to transform our Company, an area of intense focus will be maximizing efficiencies and minimizing costs. We must ensure we fund the right work, reduce duplicative efforts, and have a lean organizational structure that drives clarity, pace, and urgency. Improving how we work together and how we get work done has a tremendous impact on our efficiency as a Company and how we deliver against our plan.
We have made the very tough decision to move forward with a reduction in our workforce, focused almost entirely on Corporate and Leadership positions. This reduction affects approximately 1,750 Employee roles, or 15% of Corporate positions. Separations do not begin until late April. Until then, most Employees who are notified of their displacement will not work but will continue to receive their salary, benefits, and bonus, if eligible.
This is a very difficult and monumental shift, and I arrived at this decision after careful and thorough reflection, knowing how hard it will be to say goodbye to Cohearts who have been a significant part of our Culture and our accomplishments.
We are dedicated to operating safely and reliably for our Customers every single day. The fundamental objective of Leadership and Noncontract roles is to support our Frontline Employees as efficiently and effectively as possible. With the best intentions, the growth of our Leadership and Noncontract functions have outpaced our operation's growth for many years. Now, this group must become more lean, efficient, and agile to better serve our Frontline Employees in our shared mission of serving our Customers.
What to Expect
This will be hard, and we will treat our People with the care and respect they have earned and they deserve. Impacted Employees will receive severance and will be offered resources to provide an opportunity to ask questions and prepare for the future, like sessions with Human Resource Business Partners, a dedicated Offboarding Support Team, and outplacement services.
Moving Forward Together
This was an extremely difficult decision to make because of its impact on our People—both those who will be directly impacted and those who will remain.
Changing how we work is an essential part of becoming a more agile Company, and it will be a journey. We are building a leaner organization with increased clarity regarding what is most important, quicker decision making, and a focus on getting the right things done with urgency—not unlike our entrepreneurial founding spirit of the 1970s. As we focus on delivering on our plan, our future will be built upon the actions we take today to ensure an even brighter future.
