Southwest Airlines Makes Further Corporate Spending Cuts to Reduce Costs

Southwest Airlines The company is suspending corporate recruiting and promotions, suspending most of its summer internships and doing without some team-building events that date back to the 1980s in order to cut costs and improve margins, a CEO Bob Jordan told staff.

“Every dollar counts as we continue to struggle to return to excellent financial performance,” Jordan said in the note Monday, which was seen by CNBC.

He said the company would delay other activities “when it makes sense.”

A South West spokeswoman confirmed the changes.

“We will continue to evaluate recruiting needs on an ongoing basis to determine when it makes sense for the company to resume recruiting,” she said in an email.

As part of cost cuts, Southwest is suspending its employee “huddles,” a team-building tradition dating back to 1985, in which staff hears airline executives talk about the year’s goals and is offered food and entertainment.

Southwest spent months last year under pressure from activist Elliott Investment Management, which called for a change in the carrier’s CEO. The two sides settled in October, with Elliott winning five seats on the Southwest board, out of control, and Jordan remaining in the top job.

“We’ve made a lot of progress in 2024, and we have a lot of tangible momentum…but we’re still far from our goal of returning to industry-leading profit margins,” Jordan wrote. “A major risk in 2025 is acting as if the emergency has passed and therefore not maintaining the attention and energy of 2024.”

Last year, the airline developed a plan to increase profits that included ditching its more than 50-year-old open seating model in favor of assigned seats and creating a section with more space for legs, night flights and a more aggressive reduction of unprofitable routes.

In September, the company reduced its flights from Atlanta, eliminating jobs, although personnel were able to apply for work at other bases.

Southwest is expected to report its fourth-quarter results on January 30. Shares of the carrier are up 14% over the past 12 months, while United‘s are up more than 160% and shares of Delta Airlines And American airlines gained about 70% and 33%, respectively.