With Stimulus Package Signed, Southwest Cancels Plans for Layoffs

Southwest Airlines said today it will be able to avoid the first layoffs in the history of the company now that President Trump has signed the stimulus relief package bill.

The bill gives U.S. airlines $15 billion in aid.

“With this communication, we are halting all efforts to furlough or reduce employees’ pay, and officially rescinding the WARN notices, furlough notices, notices of potential impact and notices of pay reduction for noncontract employees that were previously sent,” CEO Gary Kelly wrote in a letter to employees Monday, as reported by our sister publication Travel Weekly.

Carriers that accept money from the aid package, as they did in March with the CARES Act, aren’t allowed to furlough, lay off or implement hourly wage cuts for any non-executive employees through March 31, 2021. Airlines previously received $25 billion in payroll support, which covered March through September of this year.

Early this month Southwest formally warned it would issue furloughs in the early spring unless their unions reached an agreement with management for temporary wage cuts. The notices are called Worker Adjustment and Retraining Notifications, or WARN notices.

Ironically, despite United and American airlines having previously laid off a combined 32,000 workers, some viewed Southwest’s announcement as the tipping point to putting together a bipartisan group of U.S. Senators that formed the basis of the $908 billion relief bill.

Southwest startled the industry by saying it planned to furlough nearly 7,000 employees due to the ramifications of the coronavirus pandemic. In its 53-year history – through the fuel crisis of the early 1970s, the Sept. 11, 2001 terrorist attacks, the economic meltdown from the 2007 housing collapse and more – Southwest has never had to resort to letting employees go.