Delta Air Lines has revealed it is laying off a number of corporate jobs, but not revealed how many: answering that key question seems necessary to me to extrapolate any true meaning from these layoffs.
Delta Lays Off Unspecified Number Of Employees In Corporate Roles
As reported by CNBC, Delta will lay off an unspecified number of corporate jobs:
“While we’re not yet back to full capacity, now is the time to make adjustments to programs, budgets and organizational structures across Delta to meet our stated goals — one part of this effort includes adjustments to corporate staffing in support of these changes. These decisions are never made lightly but always with care and respect for our impacted team members and the Delta family.”
I grant there is some symbolic significance to an airline laying off workers for the first time since the start of the pandemic.
But I don’t think we can make any conclusions at this point without knowing how many workers are impacted.
I do agree with One Mile At A Time that the higher labor costs airlines are taking on, particularly with new pilot contracts, may be unsustainable. At the same time, I do not think this news from Delta validates that point or suggests that higher labor and fuel costs are truly hurting the bottom line (after all, Delta just reported record profit).
So my response to this news is simply how many job cuts? Until we know that number, I do not think we can draw any meaningful conclusions.
CONCLUSION
Delta is cutting corporate jobs, but until we know how many it seems far-fetched to make any industry-wide conclusions. While it seems counterintuitive to make job cuts during a period of growth and profitability, it may be that one or more departments were simply a bit bloated.
image: Delta Air Lines
I’m surprised delta is laying off employees since they had a successful strong quarter. Do you think other carriers will follow like United or American?
That moneyfor those higher wages has to come from somewhere without hurting the bottom line/shareholder value/top executive bonuses…
It is my understanding that the total number of layoffs will be less than 500 and primarily “underperformers”.
Maybe they just fired the specific dickbutts who announced the original MQD changes before backtracking.
Oh, but they had enough money for Tom Brady. You gotta love the purple cult 🙂
Priorities.
How can they layoff the best there is in the business. There is nobody better, anywhere.
Ahhhh so quick to point out the pilot contract…and you know what about that? A new contract based on negotiation is exactly that. Negotiated. Delta is good at that if you didn’t notice. You think you can determine the factors of this why? Because you fly in the back a lot? Make me chuckle some more today please.
Then you point out deltas record profits and ask why they are doing cuts. Have you seen what’s going on in the world? It takes a lot to stay ahead of all the things that are damaging to airline selling of tickets. If you don’t stay adaptable and ahead of that, you post results like American Airlines.
True, cutting corporate jobs while bringing in Tom Brady as a “strategic advisor” ( wink,wink) while pumping money into Wheels-Up who has yet to ever show a profit while demand is softening is terrible optics from a employee morale perspective.
What would be interesting to know is who do they keep, the newer, younger, cheaper, inexperienced employees, or the older, experienced, more expensive employees?
” newer, younger, cheaper, inexperienced employees, or the older, experienced, more expensive employees?”
I somehow didn’t get to this 2 weeks ago, but in answer to your question, corporate likes to get rid of the AMERICAN employees. It’s a win-win for some new executive who wants to show he’s “working” as he golfs with the other executives to curry favor. “Hey Tom, are you making progress on that org chart? Fore!” Firing/hiring people is their way of “branding” themselves on the company. Generally, if there’s a “new guy” around, the serfs are going to suffer.
It’s a sad fact of corporate life that announcing layoffs usually is rewarded with stock price bumps. Looking at Delta’s stock price, it bumped up from $32 to $35 during that period. The management then calls the remaining “lucky” employees to tell them to “work harder for the team!” due to a staffing issue and then quietly hires hopefully cheaper workers, or perhaps from a bodyshop that his sister-in-law manages and gets a kickback from.
The long term consequence of this is that it trashes the work ethic. We hear “it’s all about teamwork but YOU are disposable”. I love the line from North Dallas Forty: “We’re not the team! We’re the equipment!” Smart employees learn to care solely about their own bottom line and to heck with the long term interests of the company.