United Air to slash office jobs by 30% after US aid ends

Bloomberg

United Airlines Holdings Inc will cut at least 30% of its managerial and administrative jobs when government restrictions lift in October, bracing for a prolonged travel slump in the age of Covid-19.
In addition to cutting the roughly 3,500 positions, the company will require that management and administrative employees take 20 days off without pay between May 16 and September 30 to help pare costs, Kate Gebo, executive vice president of human resources, said in an internal memo. Employees in “non-operational” roles will begin working a four-day week, and cash severance payments will end for managers who are laid off.
The cutbacks are the latest indication that there will be mass job losses in the US airline industry when the federal government’s $25 billion in payroll support runs out at the end of September. The coronavirus outbreak has prompted a decline of about 95% in US airline passenger totals, and carriers are preparing for the risk of a protracted global recession that would further sap demand for flights.
United’s disclosure to office staff came two days after the airline notified roughly 4,500 pilots that it will displace them by shifting aircraft around its network and consolidating Boeing Co 787 Dreamliner and 777 jets at certain hubs, while flying only 767-300s and not the larger 767-400.
The changes mean that nearly half of United’s pilots will be transferring to different, mainly smaller aircraft with lower hourly pay rates. United also flagged the risk of involuntary furloughs in October.
“We simply don’t know what conditions will be like in the fall,” Bryan Quigley, senior vice president of flight operations, wrote in a memo to pilots. “If conditions do not improve before October, we won’t be able to avoid furloughs.”
More than 100,000 workers at the four largest US carriers already have taken voluntary leave, reduced hours or early retirement to reduce expenses.
“We’ve worked hard these past several years to build an incredible team and make investments in our business that differentiate us,” Gebo said in the memo.
Airlines were among the worst-performing shares in the S&P 500 after Warren Buffett said Berkshire Hathaway Inc had exited its investments in the industry.
The job cuts will affect “at least” 30% of “management and administrative” staff, Gebo said, affecting a group that numbers about 11,500 employees. While some work areas will see deeper reductions than others, a United spokesman declined to say which areas will be chopped more deeply.
Most United management employees who will lose their jobs will be notified starting
in July.