United Airlines has made it clear that it may need to make significant job cuts because of the novel Coronavirus crisis and more details are slowly starting to emerge as to where those jobs are likely to be lost. In the last couple of days, the Chicago-headquartered airline said it would axe “at least” 30 per cent of management and administrative roles, while pilot numbers are also likely to be culled by around a third.
Any redundancies won’t come before the end of the CARES Act wage support relief which prevents United from firing employees because of the pandemic but the airline is already slashing working hours for thousands of employees and encouraging others to take voluntary exits.
“Unfortunately, in the coming weeks and months we expect to be faced with the need to right size our frontline workforce to match demand,” a memo from the airline read. “You can expect to hear more details from your department leaders about what these changes will mean for your workgroup,” the leaked memo continues.
United makes it clear that continuing to employ 100 per cent of its workforce as it stands now is “not sustainable” and that the airline expects to spend billions of dollars more than what it is making over the next few months.
As a condition of accepting government grants under the CARES Act, United is unable to make any of its employees redundant until September 30. The airline is now preparing staff for what might be inevitable and massive job cuts. In the meantime, United is attempting to convince staffers to resign with enhanced severance.
“We have to acknowledge that there will be serious consequences to our company if we don’t continue to take strong and decisive action, which includes making decisions that none of us ever wanted or expected to make,” another memo warns.
“At this point, we’re planning for an M&A (management and administrative) population that will be at least 30% smaller than it is today,” (emphasis by United). Employees will find out if they have been chosen by late July, with the axe set to swing on October 1 – the very first day that United is legally allowed to make its employees redundant.
“Given the upcoming reduction, I have to ask each of you to seriously consider if choosing a voluntary separation with a robust benefits package might be right for you,” the note continues.
Meanwhile, United has told nearly 4,500 of its pilots that they won’t be able to bid for any work from June 30. A similar number of pilots could face termination on October 1 – United will work through redundancies purely on seniority, so those your joined the airline last will be the first to be cut.
Last week, United revealed that it lost $1.7 billion in the first quarter and expects to lose tens of million of dollars every day over the coming months. With no clear estimate of how long the COVID-19 pandemic could go on for, United is preparing to operate a much smaller operation for at least the next two years.
Similar measures are already being implemented or are being prepared and many airlines around the world.
