American Airlines Layoffs 2020: Airline Looks To Cut Staff By 30%

American Airlines (AAL) needs to cut 30% of its management and support staff team as the airline looks to move toward a leaner operation after 39,000 employees already took voluntary leave or early retirement amid the coronavirus crisis, Elise Eberwein, executive vice president of People and Global Engagement at American, said in a letter made public by the Securities and Exchange Commission.

“Although our pre-pandemic liquidity, the significant financial assistance provided by the government, and the cash we’ve raised in the capital markets provide a foundation for stability, we need to reduce our cost structure, including our most significant expense -- the cost of compensation and benefits. And we must plan for operating a smaller airline for the foreseeable future,” Eberwein said in the letter to American management and support staff.

Eberwein continued: “We have already taken steps to prepare for this new reality, with nearly 39,000 team members electing to take a voluntary leave or early retirement. Fleet retirement accelerations are underway, and we will fly roughly 100 fewer aircraft next summer -- mostly widebodies -- than we had originally planned. Additionally, running a smaller airline means we will need a management and support staff team that is roughly 30% leaner.”

The cuts are part of an effort by American to preserve cash to help weather the downturn in air travel. The company said it is working to limit its “cash burn” by reducing expenses until consumer confidence in air travel returns.

American expects to make the job cuts by July and will continue to pay workers through Sept. 30. Eberwein said that the company will then review its frontline workers – pilots and flight attendants – asking for these employees to take voluntary leave or early retirement in June as American looks to avoid additional furloughs.

American, like other airlines, have said they need to reduce their staffing during the coronavirus pandemic despite the government aid they received, which prevents job cuts through Sept. 30.

Shares of American stock were down 3.93% as of 10:01 a.m. EDT on Thursday.