United Airlines plans to cut 16,000 jobs next month despite mega bailout

United Airlines plans to cut 16,000 jobs next month despite mega bailout
kikkuru0606 / Pixabay

United Airlines said in an internal memo that it will cut over 16,000 jobs in October. The airline plans to furlough 16,370 workers, including nearly 3,000 pilots, almost 7,000 flight attendants and over 2,000 technicians.

Play Quizzes 4

Get The Full Seth Klarman Series in PDF

Get the entire 10-part series on Seth Klarman in PDF. Save it to your desktop, read it on your tablet, or email to your colleagues.

Q2 2020 hedge fund letters, conferences and more

Other staffing areas that will be impacted by the furloughs include catering, contact center workers, management and administrators and network operation center workers.

ValueWalk’s July 2022 Hedge Fund Update: Tiger Cub Hedge Fund Shuts Down

investWelcome to our latest issue of issue of ValueWalk’s hedge fund update. Below subscribers can find an excerpt in text and the full issue in PDF format. Please send us your feedback! Featuring Andurand's oil trading profits surge, Bridgewater profits from credit, and Tiger Cub Hedge Fund shuts down. Q1 2022 hedge fund letters, conferences Read More

United Airlines plans 16,000 job cuts

The CARES Act created a $25 billion bailout fund for airlines, and as part of that fund, airlines were not permitted to cut jobs or pay until Oct. 1. United received $5 billion from that fund, so the first day it can cut jobs is Oct. 1.

Airlines must report plans for mass layoffs to employees between 60 and 90 days before they plan to enact the job cuts. Over the summer, United warned 36,000 workers that they could be laid off, amounting to half its staff in the U.S. However, the airline reduced that number to 16,000 job cuts by offering some employees packages for early retirement, voluntary leaves of absence and reduced hours, according to Fox Business.

Pandemic continues to crush air travel demand

Air travel plummeted 95% from March to mid-April when the pandemic ground the U.S. economy to a halt. The economy has been making some progress on a recovery, but the travel industry remains decimated.

In its memo to employees, United said the coronavirus pandemic has "lasted longer than almost any expert predicted" and that "in an environment where travel demand is so depressed," it can't continue to operate with "staffing levels that significantly exceed the schedule we fly."

Since the more than 16,000 job cuts being enacted by United Airlines consist mostly of furloughs, it means employees can be called back to work if demand for air travel returns. However, the airline also said in the memo that it doesn't expect demand "to return to anything resembling normal until there is a widely available treatment or vaccine."

United is just the latest airline to reveal job cuts. American Airlines and Delta Air Lines have already said they were planning furloughs for the fall.

Updated on

Michelle Jones is editor-in-chief for ValueWalk.com and has been with the site since 2012. Previously, she was a television news producer for eight years. She produced the morning news programs for the NBC affiliates in Evansville, Indiana and Huntsville, Alabama and spent a short time at the CBS affiliate in Huntsville. She has experience as a writer and public relations expert for a wide variety of businesses. Email her at Mjones@wordpress-785388-2679526.cloudwaysapps.com.
Previous article Svenska Handelsbanken And How To Use Book Value
Next article Soft Launch of the Digital Yuan: A Shift Away From US Dollar?

No posts to display