Southwest Airlines offering (9,000) worker buyouts to cut costs

[Omaha Steve]

Source: Bloomberg News

Southwest Airlines Co., already slowing growth to help boost profit, is offering buyouts to 27% of its employees to reduce operating costs.

About 9,000 workers are eligible for the buyouts, which include $25,000 cash, medical and dental benefits and travel privileges, spokeswoman Brandy King said Tuesday. It's the second such program in the Dallas-based airline's 36-year history.

The offer marks Southwest's latest effort to offset rising labor and fuel costs, its two largest expenses. The airline said in June that it would slow capacity growth in this year's fourth quarter and for all of 2008 to maximize revenue on each flight.

"Southwest is a very lean company, so when they do something like this, it's suggesting they see less growth ahead, which is a good thing," said analyst James M. Higgins of Soleil Securities Group.

Read more: http://www.latimes.com/business/la-fi-southwest18jul18,1,638267.story?coll=la-headlines-business

[peacebuzzard]

1. those are great buyout benefits.

[ikojo]

5. Depending upon how that $25k is distributed a

great deal of it could be taxed. If it is given to the employees, the ones who helped make Southwest profitable, in one lump sum then it will be taxed at gift tax rates; which in MO is almost 50%.

Sounds good on paper but if one is unable to find a job quickly that money could evaporate. I'm sure the executives are doing quite nicely at Southwest.

[DisgustedTX]

2. Said the fox selling the hen house

"Southwest is a very lean company, so when they do something like this, it's suggesting they see less growth ahead, which is a good thing," said analyst James M. Higgins of Soleil Securities Group."

Quote above should read:

Our put options are in place!


Less growth = "good thing" in Bushland for the privileged few. We have to keep SHAREHOLDER VALUE above all!

[Taverner]

6. Bushland is anti-shareholder to the core

They only want growth in certain industries - the ones they own (oil, etc)

Above all they want stagflation so that workers are desperate, angry and willing to do anything.

That's why they are anti choice
That's why they are anti minimum wage
That's why they are anti education

They want simply to destroy the middle class

[Indy_Dem_Defender]

3. I had an interview once

with Southwest very cult like atmosphere.

[robcon]

4. I assume Southwest will be cutting down on the number of airports and flights.

That's the only explanation of a 9,000 person cut. They probably over-expanded, and are losing money on some operations.

[DuaneBidoux]

7. Do they plan on rehiring at cheaper wages?

[rainbow4321]

8. Southwest's Kelleher, Barrett stepping down next year

http://www.dallasnews.com/sharedcontent/dws/bus/stories/072007dnbuskelleher.8eee5874.html

Southwest Airlines Co. said Thursday that chairman Herbert D. Kelleher will leave his post as chairman at the airline’s annual meeting in May 2008.

President Colleen Barrett will also step down from her job on July 15, 2008.

"After 41 years as an officer and director of Southwest Airlines, I will be resigning from those positions as of our shareholders' meeting in May 2008," Kelleher said.

<snip>

In its announcement, the carrier said that Mr. Kelleher and Ms. Barrett would remain full-time employees at Southwest’s Dallas headquarters for another five years after they leave their current positions.