United Airlines is facing criticism after a leaked memo from Chief Operating Officer Greg Hart encouraged employees to take voluntary severance packages and warned that layoffs were coming as soon as Oct. 1. The airline also rankled employees and the public by cutting around 15,000 employees from full-time to part-time schedules.
According to the memo, which was first published by CNN, Hart warned United employees that the company would need to "right size" its workforce as soon as Oct. 1. In light of that, he encouraged employees to consider if they wanted to take a "voluntary separation" from the company, that would presumably include some measure of severance pay.
The memo stated, "We recognize that this is painful news, but it provides what we believe is the most accurate assessment of what lies ahead for our company." The memo also claimed that the company's high-level corporate officers are taking pay cuts or foregoing their pay entirely at present.
Under the terms of the CARES Act, the company is precluded from laying off employees for at least six months, but United was clear with its employees that layoffs would likely begin on October 1. The memo stated that at least 3,400 management and administrative positions would be cut, and that potentially as many as 30% of all pilots could face layoffs.
United posted a net loss last quarter of $1.7 billion.
Airlines have been hit particularly hard from the lockdowns imposed as a result of the coronavirus pandemic, as the market for air travel has essentially evaporated. United has announced that it will cancel 90% of its travel schedule for May and June.
Also, according to an email obtained by the Daily Beast, United told some 15,000 employees on Friday that they would have their status reduced to part-time. The company claims that the hourly cuts are in full compliance with the provisions of the [Collective Bargaining Agreement] and the CARES Act." However, some of the unions whose members comprise United's workforce have stated their belief that these cuts are, in fact, a violation of the law.
United, of course, is not alone. Delta Air Lines and JetBlue also announced schedule cuts last week after having received government bailout funds.