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

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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.

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

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.