JetBlue To Lay Off Staff For The First Time In Its History

JetBlue has a long track record of never having furloughed a member of staff. However, a leaked internal memo suggests its streak could be coming to an end, as the airline is reportedly preparing to move to subcontracting positions at some of its airports. Around 300 workers could be at risk, although it is likely not all of these will have to leave the airline.

Jetblue layoffs
JetBlue could furlough its first workers in October. Photo: Getty Images

Moving to a full Business Partner model

In a leaked internal memo obtained by Business Insider, the company details a plan to begin outsourcing workers at some of the smaller airports across the airline’s network. The plan involves what the airline is calling a ‘full Business Partner model,’ which is taken to mean some staff will be laid off and replaced by contractors.

The memo, which was signed off by Mike Parkinson, JetBlue’s vice president of airports experience, was verified to Business Insider by an anonymous company employee. It is understood that the positions to be replaced include both ‘above and below wing employees,’ so could range from baggage handlers to crew.

The airline received over $900m in CARES Act funding. Photo: JetBlue

The memo reads,

“This week, we are having a number of conversations with smaller BlueCities where we have made the difficult decision to transition to a full Business Partner model after October 1, 2020. We will be able to share additional details next week after we have the opportunity to talk with impacted Crewmembers. Please know that we are partnering closely with the Airports Values Committee on these changes.”

October 1st is a key date in terms of the CARES Act funding, of which this airline has received $936m. Until that date, no recipient of funds is allowed to lay off or furlough any workers, and has to maintain their network, although some exceptions have been made. After the 1st, however, airlines are free to progress as they see fit, which has led to many employees feeling fearful for their positions into the fall.

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Cutting costs

For JetBlue, trimming costs going forward is a necessary evil. Although it still has plans for new aircraft and new flights to Europe, the downturn in travel demand and potential for a second spike in cases of COVID have put a damper on its expansion plans. In a recent interview for World Aviation Festival, COO and President, Joanna Geraghty, admitted the airline would be smaller. She said,

“I think JetBlue will look smaller, but at the end of the day we have a very long history of 20 years of never furloughing a coworker. Our focus right now is doing everything we can to protect jobs.”

When pressed on how much smaller the airline could emerge, Geraghty was reluctant to be specific, saying,

“Every week brings far more information, so I think it would be irresponsible to project what the fall is going to look like, because there is just so much uncertainty.”

JetBlue, New York, Guatemala City
Operations both above and below wing could be outsourced. Photo: Getty Images

Outsourcing ops is a common practice at smaller airports with less frequent services, as it can be cheaper than having direct employees performing the necessary functions. Parkinson’s memo continues,

“The continued impact of coronavirus on our industry has left us no choice but to look for new ways to run our airline. This decision is in no way a reflection of our Crewmembers’ level of work in those cities who live the JetBlue Culture every day and offer the JetBlue experience our Customers love.”

300 employees could be affected

Although the memo doesn’t specify numbers, an anonymous source told Business Insider that they expected around 300 workers to be affected. However, that doesn’t mean that 300 layoffs are coming for certain.

JetBlue has been proactively attempting to reduce its workforce and trim costs through voluntary separation programs. This generally takes the form of either unpaid time off or opting out with either long term benefits or a cash payment.

Jetblue layoffs
The airline is likely to attempt to redeploy or secure voluntary arrangements with affected employees. Photo: Getty Images

Previously, CEO Robin Hayes said in an interview that the take-up of voluntary time off or separation had been good. He said,

“60% of people of our crew members have already taken some kind of voluntary time off for the summer, so we’re going to see how much interest there is. I think there’s going to be substantial interest in continuing that, and then we’ll see where we are and will only resort to involuntary furloughs from the 1st of October if we really have to.”

As well as leaving the airline, there are likely to be opportunities for redeployment also. How many are able to be accommodated by these means remains to be seen. It’s likely that October could see JetBlue breaking its 20-year streak of never having furloughed a coworker.