Southwest Airlines is hitting pause on corporate hiring, promotions and summer internships to cut costs after months of pressure from an activist investor.
The Dallas-based airline is also halting its “Southwest Rallies,” a team-building program dating back to 1985 with free food and entertainment where company leaders speak to staffers about Southwest’s vision moving forward.
“Every single dollar matters as we continue to fight to return to excellent financial performance,” CEO Bob Jordan told staffers on Monday in a note obtained by CNBC.
The company will delay other activities “when it makes sense,” Jordan said.
Shares in the company inched up about 1% Tuesday morning.
A Southwest spokesperson confirmed the airline’s move to limit “discretionary costs.”
She said the airline is pausing most of its summer internships, while honoring the offers already made, and pausing internal and external hiring.
“We’ll continue to evaluate hiring needs on an ongoing basis to determine when it makes sense for the business to resume hiring,” the spokesperson told The Post in a statement.
Southwest spent months last year embroiled in a bitter proxy fight with activist investor Elliott Investment Management, founded by billionaire Paul Singer.
The feud ended in a deal in October that allowed Jordan to remain at the helm – despite Elliott’s calls for new leadership – but gave five Southwest board seats to the activist fund.
The deal represented the most seats the hedge fund has ever won in a settlement with a US company.
Elliott has also recently built sizable stakes in Starbucks and Honeywell International, an aerospace and automation company.
Southwest unveiled a slew of changes last year as it sought to boost business.
The nearly-60-year-old airline tossed out its signature open seating model in favor of assigned seats and created more seating options, like pricier tickets with more legroom.
The airline also started offering overnight flights and cut back on less cost-effective routes – slashing routes from Atlanta in September.
The move cut jobs, though the airline allowed staff to apply for work out of other Southwest bases.
Southwest shares are up about 14% over the past 12 months – growing at a slower pace than industry rivals.
United Airlines shares rose nearly 170% in the same period.
Delta Air Lines shares jumped about 74% and American Airlines shares grew 33% over the past 12 months.