In a memo issued today to personnel, United Airlines announced that around 36,000 workers-45 percent of its frontline employees in the U.S. and over one-third of its entire workforce of 95,000-are facing layoffs, come October 1, 2020. This number doesn't include the 1,400 layoffs of management and administrative staff that was already previously announced.
"After months of aggressive cost-cutting and proactive capital-raising, today we updated employees about a topic we've always dreaded and the action that was always a last resort in the context of this COVID-19 pandemic: involuntary furloughs," United said.
The job cuts are being referred to as "involuntary furloughs," since most of the impacted employees will remain eligible to be recalled to work when travel demand resumes under terms outlined in their union contracts.
Airlines like United that accepted federal funds from the Coronavirus Aid, Relief, and Economic Security (CARES) Act are prevented from laying off workers prior to October 1, 2020, because of strict payroll protection provisions. United, specifically, received a $3.5 billion grant from the federal government and a $1.5-billion loan for payroll protection.
"The reality is that United simply cannot continue at our current payroll level past October 1 in an environment where travel demand is so depressed. And, involuntary furloughs come as a last resort, after months of company-wide cost-cutting and capital-raising," the airline wrote in a statement.
USA Today reported that around 26,000 of those affected in Fall 2020 will consist of flight attendants and about half the airline's cabin crew members, airport customer service staff and gate agents. Warnings of the impending cuts are being sent to around 15,000 flight attendants and more than 2,200 pilots. But, receipt of a "Warn" notice doesn't necessarily mean an employee will definitely be let go, the airline said.
United was obliged to release its predicted layoff numbers at this time because federal law requires employers to provide advance-warning notices of possible mass-scale furloughs or layoffs at least 60 days in advance.
In a briefing held with reporters, United executives said that they hope final furlough numbers (which should be known by late August) will be lower than currently forecast, as eligible employees are being urged to accept voluntary exit programs like early retirement incentives.
President of the Association of Flight Attendants-CWA, Sara Nelson, remarked: "The United Airlines projected furlough numbers are a gut punch, but they are also the most honest assessment we've seen on the state of the industry," CNBC revealed.
In a statement, she wrote: "COVID-19 is an unprecedented threat to aviation workers and the entire U.S. aviation industry. This crisis dwarfs all others in aviation history and there's no end in sight. Demand was just barely climbing back to 20 percent of last year and even those minimal gains evaporated over the last week, due to surging COVID-19 cases across the country."
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