- Southwest Airlines is cutting costs.
- It’s pausing corporate hiring, summer internships, and a popular team-building tradition.
- The move comes after a dispute with activist firm Elliott Investment Management.
Southwest Airlines is pausing corporate hiring to cut costs, a company spokesperson confirmed to Business Insider.
The airline is “pausing all noncontract internal and external hiring,” the spokesperson said.
It is also pausing summer internships. Southwest said it would honor all internship offers already made but would not make new offers.
CNBC first reported the news, citing a memo from CEO Bob Jordan.
“Every single dollar matters as we continue to fight to return to excellent financial performance,” he told staff, per the memo.
As well as pausing hiring, Southwest said it is making cuts to non-core spending, including stopping its long-standing tradition of holding staff rallies.
“We are limiting discretionary costs, including holding on the Southwest Rallies for this year, as we focus on reducing costs,” the spokesperson told BI.
Southwest Rallies have been a team-building tradition since 1985, where senior leaders lay out plans for the year and celebrate accomplishments with staff.
“We’ll continue to evaluate hiring needs on an ongoing basis to determine when it makes sense for the business to resume hiring,” the spokesperson added.
The cost cuts come as Southwest continues to face pressure from investors over poor financial performance.
Activist fund Elliott Investment Management has been the most prominent voice, and in 2024, called for the airline to replace its CEO and review its business model.
Last July, Southwest announced it would ditch its open-seating model and offer some premium-seating options — a departure from its no-frills offering that first inspired the budget airline model.
In October, the two sides reached a deal that saw Jordan remain in the top job while Elliott named six directors to the airline’s board.
Southwest stock is up 13.7% over the past year, but down 40% over the past five years.
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