American Airlines Management Layoffs Are Coming

American Airlines CEO Doug Parker and President Robert Isom have sent out a letter to American employees today announcing upcoming layoffs. This comes nearly five years after the integration between American and US Airways, and reflects the number of redundant positions they have at this point.

Here’s the letter that was sent out to employees in its entirety, which is worth a read:

Dear Management and Support Staff Team Members,

Earlier today, we held our quarterly director and above meeting where we discussed our need to operate more efficiently and build the next generation of leaders.

We’ve been talking about playing the long game for some time and an important piece of this is creating the right organizational structure for the future. Our current organizational structure resulted largely from integration work that followed our merger and, as all companies do from time to time, we need to evaluate our current organization with a goal to operate more productively. This work starts at the top.

As a result of the integration work required, American has more director and above leaders than we require for the long term. It is a worthy exercise to consider each leader’s span of care (how many direct reports one has), individual performance, and growth opportunities within each area. Over the next several weeks, our top leaders will engage in career conversations with their director and above team members that will include both some involuntary exits as well as an option for those who have been with the company for at least two years to leave American voluntarily with severance benefits. Similar to early outs that have been offered to several of our frontline groups, this is an opportunity for team members at those levels to reflect on their current roles and their futures. It will also give department leaders the opportunity to potentially combine positions at those levels. The outcome will provide future growth opportunities for team members who have not yet reached the level of director, and reduce overall positions of higher management.

Reviewing our current structure and having this dialogue with top leaders is a productive way to appreciate what has been created thus far, build on that momentum for the future, and open new paths of career progression for the next generation of leaders. While much of this restructuring will happen at the director and above level, we will also take the opportunity to look at our non-frontline facing management structure. The majority of improving efficiency at those levels will happen through the elimination of open positions and attrition. However, as leaders take the time to look at their organization, there is the potential for some involuntary departures as well. In those cases, impacted team members would also receive severance benefits and outplacement assistance.

We are nearly five years into integration. While not all integration work is complete, much of it is and as a result, now is the right time to look at the organizational structure we need for the future. This will require all of us to challenge the way we have always done things and think creatively and broadly about American’s very bright future. Thank you for being part of this journey and for all you do for American.

First of all, kudos to Parker and Isom for using just about every corporate word imaginable, possibly with the exception of “synergies” and “enhancement.”

In all honesty, I have to give them credit for the transparent way they’re communicating here, and this actually seems logical enough. Based on what I’ve heard from those in management, they do indeed have way too many director-level employees due to the merger, and it’s time for things to be cleaned up a bit.

Of course I’ll be sad for anyone who loses their job, as that’s never fun, though structurally it seems to make sense. They say they’re evaluating their organization starting at the top, though personally I think it’s a shame that they’re not starting at the very top. 😉

Comments

  1. The B-school buzz words were clearly the low-hanging-fruit plucked during the open dialogue they held to white box their organizational opportunities and personnel utilization metrics. In summary, fuel prices are up and management jobs are going down.

  2. @ DLPTATL — Sorry, but I don’t think that’s true. American Airlines will never lose money again, and actually, their current profits are as low as they’ll ever be. Even Doug Parker said so!

  3. I understand they need to do what’s most efficient for AA but at the same time, employee morale at the moment is probably not be that good if layoffs are imminent.

  4. The letter includes this: “…will include both some involuntary exits as well as an option for those who have been with the company for at least two years to leave American voluntarily with severance benefits.”

    So does “involuntary exits” mean firing for cause? Or does it mean “We don’t need you, get out,” and not paying any sort of severance?

  5. “next generation of leaders”
    HAHA We mean leaders who can work 80 hours a week, and do 2 people’s job.

  6. American has been led to a profit by reduced competition and only by reduced competition. Nothing than clown has done other than forcing a merger has had any positive impact on the brand. Maybe Douggie should be he first to go.

  7. What a bunch of corporate bullshit. These two clowns should be fired immediately. They’re embarrassing themselves with this letter.

  8. @Ryan – I think an extended run of low fuel prices played a significant role too, but I agree with your point that their success is almost entirely due to favorable conditions rather than management and leadership excellence. Dougie thinks it’s all him, fact is they could get a hangar mechanic to run the company in the environment he’s had and still make money. We are in a 9 year economic expansion with relatively low fuel prices and continually dwindling competition, he should thank God every day that he wakes up that he got to be CEO when he did. But he’s arrogant enough to never let that thought cross his mind.

  9. @Geoff and his ilk are the type who’ve never worked for a large company, never been in management, or a combination of the two. And your type always complain about cutbacks, or reduced benefits, or any other thing that “hurts the little guy.” There are always layoffs with mergers. I’m surprised it took five years. Get a grip, or more specifically get enrolled in a macroeconomics and finance class.

  10. The best thing you can say about this is the the folks getting canned are entering a 3.8% unemployment job market. They will probably land on their feet.

  11. @Jay spot on. As they say “its always easier to spend someone else’s money.” Lots of criticism for Doug, some deserved, but the bottom line is that this guy is acting with a ton of transparency to his employees. It’s a fortune 100 company not a startup you can’t just maneuver the company and make everything great with one or two decisions, big structural and procedural changes need to happen and this is one of them.

  12. Let’s also not credit Doug for the way he made this merger happen. It was all lies … he has absolutely no values (not saying many CEOs do) but that guy has absolutely none. Remember he also has 2 DUIs. That would most certainly disqualify pretty much all of his front line from a chance of employment.

  13. @Jay, since you called me out, FWIW I work for a Wall St firm with over 60,000 employees and have an undergrad and master’s degree. Like I said, that likely doesn’t mean much at my stage of my career but it seems that you are the one with no business sense if you’re unable to see that this letter contains more corporatese than should be tolerated.
    And if you actually tried to read my comment you would find that I was not complaining about cutbacks or work force reductions but was simply rolling my eyes at the ridiculous amount of rhetoric in the letter.

  14. “Playing the long game”, so they need more “early outs”. Puke. Next will be “reaching out” via meetings/interviews to tell people they’re fired. All from those living’ high on the hog ‘ courtesy of taxpayer-funded subsidies, bailouts and protections.

  15. Layoffs should include:
    * Whoever decided the 737MAX configuration, current (dis)-AAdvantage program, current domestic F meals
    * Any customer facing employees (agents, flight attendants, etc) who are consistently rude to customers

  16. What you’re reading is the lay off notice for what’s left of pre-merger AA senior managers, most of whom will have been sidelined in the last few years, with reduced roles and smaller teams. They may as well move HQ back to PHX. This was inevitable.

  17. LOL Geoff, people with agendas simply grab a snippet of a comment to use as a platform to bleat their agenda. Since in his eyes you did not support the party line of corporations are gods, you were called out. Probably struck a nerve with him to get him all riled up like that. Noticed how he made all sorts of assumptions about you?

  18. @Lucky: “American Airlines will never lose money again, and actually, their current profits are as low as they’ll ever be.” Seriously? You are joking, right? Let’s record that quote for the future :).
    Airlines will always be subject to big losses especially as they are exposed to fuel prices, new competition, and economy through passenger demand. Cyclical losing big and gaining big are part of the airline business.

  19. @dmodemd:

    Lucky was joking. Several months ago. Parker made the comment that they’d never lose money again.

    Austin787: spot on about the 737MAX configuration.

  20. I can tell you employee morale at AA is at an all time low. Upper management hires outside consulting firms to do “surveys” of the employees, changes nothing important, and wonders why everyone from reservations to pilots still does not trust them. I agree the major changes should start with Doug and Robert. Those two couldnt pour piss out of a boot if the instructions were on the heel.

  21. It should really start at THE VERY TOP ….
    As a ‘Veteran’ with mostly AA, for 35 years….
    I’ve been UP, then DOWN, then Up…
    As of late, too much ‘metal’ has been ordered for the ‘largest US Airline’…with a Trained Pilot Shortage looming…all previously projected plans seem unfit…much like the Emirates sinking profits after ordering, and continuing to order more A380’s….Even the UAE’s Pockets are showing threads….
    Finally, dispensing Free drinks and
    Cookies to PAX in Econ is too little too late….as is reflected as well in the lack of movement of the static’ tail….sorry, had to get that last ‘jab’ in…

  22. Gas up a buck that Axe-man will B ready , better to do it Now . U have computers u don’t need people saying anything just let the workers do their job or AX them too .

    CHEERs

  23. “What you’re reading is the lay off notice for what’s left of pre-merger AA senior managers”

    ^^
    Exactly

  24. I’m with lucky, we’ll written letter and makes sense. Glad they’re not touching front line.

  25. I’m a Washington lobbyist and I’m pretty sure USAir/AA made promises to the Obama administration and to the Hill that the new company wouldn’t cut jobs during the first 5 years of the merged company. Clock’s run out and they can’t wait to slim down the payroll… Glad AA gave out those tax cut bonuses!

  26. directors and above will be taken care of. the ones to get the shaft will be the supervisors. now if they could work in their product a bit, and enforce the carry on policy and lastly give the flight attendants a hug

  27. INVOLUNTARY DEPARTURES

    Lol at that amazing combination of words. Euphemism doesn’t seem an adequate descriptor anymore. I wish we could involuntarily depart on time every once in a while

  28. The wonder of it ,will it be only LAA management Directors or it will it be LUS Or America West
    Have a funny feeling LAA will take the brunt
    At the time of the Merger we where “Taking the Brand “ just the Name as I and others took that

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