While exact details remain to be seen, it sounds like American Airlines is planning some significant layoffs for both management and support staff.
American reportedly planning thousands of layoffs
The always knowledge JonNYC reports that American is planning layoffs for management and support staff, with around 2,000 people possibly expected to lose their jobs. The plan has reportedly been finalized, with announcements at the Fort Worth-based airline expected across departments in the coming days.
Obviously I feel bad for anyone losing their job. The airline industry is one of passion, and it’s probably not a great time to be looking for a job at another airline.
Is this logical, or is American being short sighted?
It’s obviously a strange time for American. The carrier is greatly lagging both Delta and United financially. American spent years pursuing a failed strategy of trying to cut costs and focus less on corporate travel, and that has all backfired. It’s hard to cost cut your way into better margins when you have American’s labor costs and debt.
Now the airline is going in the other direction, and wants to be “premium,” all of a sudden. The challenge is, even if American can come up with a vision, Delta and United are also both going full steam ahead with their strategies, so there’s a lot of catching up to do.
Now, does laying off thousands of management employees once again focus on the wrong thing, emphasizing cutting costs over increasing revenue? I wouldn’t necessarily assume so:
- There’s no denying that there has been huge bloat post-coronavirus in terms of the workforces at airlines, where the airlines proportionally have more employees compared to passengers
- Just having a lot of people doesn’t necessarily mean that more will get done, especially if you’re American 😉
- Really American would just be following United’s lead here (once again), as United’s management headcount is down 4% compared to the previous year, and it plans another 4% reduction over the next year, thanks partly to AI-driven processes being expanded; however, that largely didn’t come in the form of layoffs, but instead, natural attrition
So yeah, while I feel bad for those losing their jobs, it’s not necessarily an unreasonable direction to take. That being said, American’s biggest issue continues to be its lack of a strategy. I’m happy to see American making some improvements, but I’m not sure this piecemeal approach to becoming more premium will really project to employees what the vision is that they should get behind, and that’s a key part to improving.
Bottom line
American Airlines is reportedly planning thousands of layoffs for management and support staff positions, as the airline looks to become more efficient post-pandemic. While I think American should primarily be focused on revenue over costs, there’s no denying that AI will make some jobs a bit redundant, and similarly, we’ve seen a reduction in headcount at United.
What do you make of American’s planned layoffs?