CHICAGO — United Airlines is planning to cut staff as it deals with the economic impact of the coronavirus pandemic.
The Chicago-based airline warned layoffs could be coming a few weeks ago. But now it’s official, and the city could be hit especially hard.
It’s been a painful year for United. The company has grounded flights around the world, and passenger numbers are down roughly 95% in U.S. airports, compared to this time last year.
United reported a $1.7 billion first quarter loss, and it’s forced the company to drastically reduce it’s workforce.
United Airlines plans to cut more than 3400 management and administrative positions Oct. 1. This represents about 30% of those employees, most of whom work in Chicago.
A United spokesperson said employees affected by the cuts will be notified in July.
Human resources sent out a company memo on Monday, saying, in part:
“We have to acknowledge that there will be serious consequences to our company if we don’t continue to take strong and decisive action, which includes making decisions that none of us ever wanted or expected to make.”United Airlines
So why wait until October?
The airline received $5 billion in federal financial assistance to keep workers on its payroll through Sept. 30.
Under the terms of the federal assistance United received, they are not allowed to make job or pay cuts until Sept. 30.
“I am extremely disappointed. As a matter of fact, there’s a sense of betrayal with me,” said U.S. Rep. Jesus “Chuy” Garcia. “As a member of the Committee on Transportation and Infrastructure in Congress, when this package of assistance for airlines was being hammered out, part of their commitment was that they would keep workers on the payroll.”
United has warned that air travel is unlikely to fully recover by then, forcing it to downsize.
“Travel demand is essentially zero for the foreseeable future and, even with federal assistance that covers a portion of our payroll expense through September 30, we anticipate spending billions of dollars more than we take in for the next several months while continuing to employ %100 of our workforce. That’s not sustainable for any company,” United said in a statement.
Garcia questioned what that would mean for employees going into the fall.
“It seems like a backhanded way to announce bad news and it only makes us brace for what they will do beginning October 1, when the instructions in the law have expired,” he said.
The airlines said they also plan to announce a voluntary separation package for management and administrative employees in mid-May.
They will also be required to take 20 unpaid days off between now and Sept. 30.
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