Canadian airline WestJet is laying off 3,333 workers in the immediate future. It is an eye-catching number but there is nothing eye-catching about losing your job. As for WestJet, they prefer to speak of it in anodyne corporate-speak, calling the layoffs “organizational changes.”
“Today’s announcement regarding these strategic but unavoidable changes will allow us to provide security to our remaining 10,000 WestJetters, and to carry on the work of transforming our business,” said WestJet President and CEO Ed Sims in a video message yesterday.
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3,333 employees to go in “organizational changes” at WestJet
In a media statement, WestJet acknowledged the impact of COVID-19 on the business. Capacity is down by 90% on year on year basis. Earlier this year, the airline was flying high, with approximately 14,000 employees.
Now, WestJet has just 4,500 employees on its books. A further 5,500 are furloughed with most likely to come back. But there remains a surplus pool of employees.
“WestJet has remained self-sufficient throughout this extended crisis, cutting our costs by more than 60 percent,” said Mr Sims.
“The damage we’ve incurred from a weakened demand environment is being compounded by multiple factors. The reality in which we find ourselves requires difficult and often painful decisions to ensure our continued viability in the future.”
Operations and call center staff in the spotlight
There are reports employees got the bad news by email. In the spotlight are 2,300 airport operations staff, including customer service agents and baggage handlers. To cut costs, WestJet has contracted out many of these roles, or, as WestJet puts it, “selected new airport service partners.” Mr Sims has said he would like these airport service partners to employ as many laid-off employees as possible.
There are also 450 call center positions going. WestJet has call centers across Canada, including in Calgary, Vancouver, Halifax, and Moncton. The Moncton call center is losing 250 jobs. A further 600 head office positions at WestJet and Swoop (WestJet’s low-cost subsidiary) will also go.
“Reducing WestJetter roles has always been a last resort. If there were other viable options available to us, we would be taking them,” said Mr Sims in his video message.
WestJet plans for life beyond the next few months
WestJet has accessed Canada’s Emergency Wage Subsidy Program. The subsidy provides a 75% wage top-up. That’s allowed WestJet to keep its payroll at around 10,000 employees. This is despite there being no work for most of them.
But the subsidy payroll only has a limited lifespan. It has already been extended once, but businesses have to look beyond the next couple of months. That’s what WestJet has done this week. The airline acknowledges it will take some time for its domestic flying to get back to normal. International operations may take even longer.
“We might not be our previous size for a long time, if ever … we just might not get back there,” said WestJet’s CEO.
Admirably, WestJet has continued to fly to its 38 destinations around Canada this year, albeit at a substantially reduced capacity. Ed Sims speaks of 2020 as the worst crisis aviation has ever faced. He sees his job as getting the airline through this. Making these hard decisions will help him do so. But it’s a bleak outlook for the thousands of employees (or WestJetters in WestJet’s corporate-speak) losing their jobs amidst this week’s organizational changes.