American and Delta are preparing for potentially massive layoffs

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In a letter addressed to employees, American said Wednesday that it had to eliminate around 30% of its management and support staff due to its transition to a smaller airline. In addition to the staff reductions, the Dallas-based company said that involuntary separation decisions will be communicated in July and that staff members will be on payroll until September 30th.

“A more efficient leadership team starts at the top and we are restructuring all the levels around the main leaders and future functions, starting with our team of officials,” said the letter. “We will announce a reorganized team of officials soon, and these leaders will restructure to later levels soon after.”

Delta (FROM) he announced a similar initiative Thursday, telling employees in a CNN reminder that “a smaller Delta unfortunately means fewer people will be needed.” The airline drastically reduced its schedule in the spring, but is restoring some routes in June. However, its second quarter schedule is 85% lower than the same period last year.

The company offers employees two voluntary exit programs, including a retirement package for employees who have worked at Delta for over 25 years. It also offers another buyout that covers most of its 90,000 employees.

No airline can enact the layoffs expected until October, once the limitation on federal lifeboats. Several U.S. airlines accepted government money in April, including Delta, American, southwest (LUV) and United for a total of approximately $ 50 billion.
Kingdom (UAL) he warned in April that he was planning to reduce his employee count this fall after claiming that travel demand is “almost zero”. He warned some staff members that the airline will drastically cut hours and staff in the months to come.

In a note issued to approximately 11,500 workers, United Human Resources manager Kate Gebo said the company’s management and administration team could be reduced by 30% in October after funding by the United States government’s CARES Act.

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United announced earlier this month that 20,000 employees, more than 20% of its staff, have taken voluntary leave. They also announced that it will offer buyouts and early retirement packages to employees.

But United Airlines’ new CEO last week said he hopes to avoid staff cuts, despite the need to significantly reduce labor costs in the face of significantly lower demand for air travel.

-CNN Business’ Chris Isidore contributed to this report.


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