Delta Offers Employee Exit Programs in Anticipation of Massive Layoffs | Financial Buzz

Delta Offers Employee Exit Programs in Anticipation of Massive Layoffs

In an attempt to cut expenses amid the coronavirus pandemic, Delta Air Lines (NYSE: DAL), has begun to offer employee buyouts and early retirement. 

A letter to personnel from CEO Ed Bastian stated “While we never dreamed just a few months ago that we would be talking about a smaller Delta – this was expected to be a year of growth, after all – this is the reality we’re facing.” He continued, “Every voluntary departure helps to protect the jobs of those who most need them.” 

All US airlines are restricted from firing staff or reducing their salaries until September 30, established as one of the conditions of the USD25 Billion federal aid they began to receive last month. Nevertheless, airlines are still striving to reduce spend as travel sales persist 80% lower than last year’s standard. 

Delta could be preparing for a potentially massive layoff, similar to American Airlines who announced it would be reducing management and administrative workers by 30%, summing almost 5,000 people. 

In a letter to employees, American wrote “A more efficient leadership team begins at the top, and we are restructuring all levels around key future leaders and functions, beginning with our officer team.” It continued, “We will announce a reorganized officer team soon, and those leaders will be restructuring at the next levels shortly thereafter.”

Though Delta is set to reopen some previously closed routes in June, its second-quarter agenda remains 85% lower than last year. Consequently, the airline’s memo to employees, established that a “smaller Delta unfortunately means fewer people will be required.”