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Published on Thursday, May 28, 2020

American Airlines plans to cut 30 percent of management jobs






American Airlines is planning big cuts to its management and administrative ranks with up to 30% reductions.


The airline has started offering buyouts and will also take requests for buyouts and voluntary leave from customer-facing employees such as flight attendants from next month.


The downsizing was outlined in a memo, according to CNBC.


"We need to reduce our cost structure, including our most significant expense — the cost of compensation and benefits," Elise Eberwein, AA's executive vice president of people and global engagement, said in the memo.


"Additionally, running a smaller airline means we will need a management and support staff team that is roughly 30% leaner," Eberwein added.


For weeks the airline has fought off talk that it could file for bankruptcy protection.


Management and admin staff can apply for buyouts until June 10.


Nearly 40,000 of American's 130,000 employees have taken voluntary leave or early retirement.


"There is no doubt this is going to be a painful time for all, especially for our departing colleagues, who have given American Airlines their all," Eberwein said.


CEO Doug Parker has dismissed talks of another bankruptcy for American.


In fact he doesn't think any US airline will fail due to the Covid-19 pandemic.


"We're all going to raise enough liquidity. I don't think you're going to see anybody fall by the wayside in this crisis."


However, American has to manage about $30 billion of debt which will stifle its attempts to move forward into profitability after the travel market recovers.


Parker of course uttered the now infamous words two years ago: "I don't think we're ever going to lose money again. We have an industry that's going to be profitable in good and bad times."


 

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