Southwest pausing some hirings, internships as the airline looks to reduce costs

Southwest Airlines (LUV:) is hitting the pause button on some of its hiring, internships and employee events this year as the company looks to cut costs.

“We are limiting discretionary spending, including this year’s Southwest rallies, as we focus on cost reduction,” the company said in a prepared statement Tuesday We are hiring all non-contractual internal and external employment.

Southwest said it will continue to evaluate its hiring needs to determine when it is most prudent to resume hiring.

Back in September Southwest announced that it would reshuffle its board and that its chairman would retire in 2025, leaving the hedge fund in part. Elliott Investment Managementwhich requires changes in the airline.

Elliott, a fund led by billionaire investor Paul Singer, has built a minority stake in Southwest and has championed changes it says will improve the company’s financials and stock price.

Both parties arrived setting in October. Southwest said at the time that Chairman Gary Kelly and six board members would leave Nov. 1 and be replaced by five candidates backed by Elliott and a former Chevron executive.

Southwest was a profit machine for its first 50 years; it never posted a full-year loss until the pandemic decimated air travel in 2020. Since then, the company has been more profitable than American Airlines but far less than Delta Air Lines and United. Airlines.

Southwest had an inauspicious beginning for most of its history. It operated from less crowded secondary airports where it could turn around and take off with new passengers. It attracted budget-conscious travelers by offering low fares and no reservation fees to change or check up to two bags.

But Southwest now flies out of many of the same major airports as its competitors.With the rise of “ultra-low-cost carriers,” it’s often undercutting the price.

As part of its efforts to turn the business around, Southwest announced plans to increase revenues converting almost a third of its seats to premium seats with extra legroom.It will also start allocating seats — to end the long-standing practice of allowing passengers to self-select their seats after boarding. And it is partnering with international airlines, starting with Icelandair, to offer destinations outside of North America and Central America.

In November, a Dallas airline offered shopping and extended vacations for airport workers to avoid what he called “overwork in some places,” which he blamed on a shortage of new planes from Boeing.

Southwest shares were up slightly in morning trading.