CEO Kelly Says Move Is Meant To Save Money, Not Reduce Workforce

It appears longtime employees at Southwest Airlines either really like their jobs... or are unwilling to give them up and take a chance in starting over with someone else. The Dallas, TX-based low-cost carrier reports a mere seven percent of 8,500 workers eligible for a buyout program -- 607 people -- accepted the offer.

As ANN reported, the carrier said in July it offered 'early-out' packages to about 1/4 of its workforce in a move to replace longtime employees with less expensive new ones in a cut cost-cutting measure.

"It is completely voluntary," Southwest CEO Gary Kelly said of the offer. "It is an effort solely to reduce higher labor rates with lower, and it is not a program to reduce our head count. So let me make that clear -- we will replace virtually all positions that get vacated through this voluntary early departure program."

The package SWA offered included $25,000 in cash plus health and dental benefits and continued flight privileges for job classifications such as baggage handlers and flight attendants.

Of the workers that have taken the offer so far, 395 come from the ranks of reservations, 166 from ground operations, 41 from in-flight services and seven from provisioning, Southwest spokesperson Beth Harbin told The Associated Press.

The offer wasn't extended to the company's higher-paid employees like mechanics and pilots, as the carrier felt that would have been far too costly.

"We did not have a target for the number of employees we expected to take the package," Harbin said. "Our only goal was to meet the individual needs of each eligible employee."

Southwest offered a similar deal in 2004... and more than 1,000 employees accepted it. That package paid up to $1,000 per year of service plus health benefits, reported the AP.

The carrier is also slowing down its growth for the time being. Kelly said earlier in the summer SWA's growth rate would be six percent a year, down from eight percent to match slower revenue increases.

Employees accepting the buyout offer will leave anywhere between September 30 and April 30. When they leave will be "based on the operational needs of particular work locations and departments," Harbin said.

FMI: www.southwest.com