Southwest Airlines cuts contract workers
Dallas-based Southwest Airlines cut hundreds of contract workers this week who help handle calls to its Dallas headquarters from frustrated customers.
The cuts affect the airline’s Customer Relations Rapid Rewards team. As many as 300 contract workers were hired through Illinois staffing firm Make Corporation, which has an office in Plano.
The contractors dealt with upset customers after calls had been escalated from front-line workers. They worked alongside hundreds of regular Southwest Airlines employees performing the same function.
The reduction came the same day that CEO Gary Kelly said Southwest would offer a voluntary separation package to employees with more details to come June 1, another move to cut costs in the midst of a prolonged travel downturn.
“Know that we are taking every action possible to protect the Southwest family and jobs,” Kelly said in a video on the company’s website. “But remember the imperative here is to ensure the company’s survival. Without that, there are no jobs.”
A Southwest spokeswoman said the company did not know exactly how many jobs were eliminated when it discontinued the customer relations contract.
“As previously shared with external audiences, Southwest is managing through this challenging time by looking for ways to trim discretionary spending and preserve cash,” said spokeswoman Ro Hawthorne. “As part of this focus, Southwest has been suspending the use of agencies, contractors, and consultants across our business for the past few months. These decisions are never easy, and the actions are taken only after long and careful consideration.”
Southwest has been aggressively trying to reduce expenses during the last two months as the COVID-19 pandemic caused an unprecedented drop in airline ticket sales. The airline has already sliced more than 60 percent of its flights and thousands of workers have taken voluntary time off. Kelly has warned that more cuts will be needed in the months ahead.
“The contractors were utilized to augment our existing customer relations team who will continue serving customers with the same level of Southwest hospitality that individuals expect from Southwest Airlines,” Hawthorne said.
The contractors workeds at Dallas Love Field.
Southwest Airlines said it has never had a layoff in its 49-year history. However, companies often don’t consider contractors as regular employees and don’t classify these kinds of cuts as layoffs.
Like other airlines, Southwest is prevented from laying off or cutting jobs because it took about $3.2 billion in government stimulus aid in the form of loans and grants. Southwest officially can’t cut any jobs until after Sept. 30, but it can encourage employees to take time off on their own. It can also discontinue deals with contractors and consultants, who are responsible for hundreds of employees who do work for Southwest.
Southwest said that about 21 percent of its workforce took more than a half-million unpaid hours off in April, the equivalent of about 3,000 full-time employees. More than 9,600 workers are on some kind of unpaid leave in May, Kelly said.
“We don’t know how long it will take the industry to recover,” Kelly said. “We knew it took years after 9/11 and this is far worst. Realistically we can’t expect that things will be back to normal in six or even 12 months.”