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United Airlines said Wednesday it expects to cut 16,370 jobs on Oct. 1, far fewer than the 36,000 it warned of two months ago, as suspense builds over whether Congress will extend relief for the struggling airline industry.
Between the lines: United was able to limit the layoffs by cutting costs, raising debt and encouraging tens of thousands of employees to participate in a variety of voluntary leave, early retirement and reduced hours programs.
- Airport operations employees, for example, can take a voluntary paid leave for 12 months — at 25% pay, plus health benefits — but can be called back at any time with 14 days' notice.
- Flight attendants can take an eight- or 13-month leave, with health benefits, but can pick up occasional flights when available.
- Such voluntary programs give employees flexibility but will help the company bounce back faster, a spokesman said.
What they're saying: "The pandemic has drawn us in deeper and lasted longer than almost any expert predicted, and in an environment where travel demand is so depressed, United cannot continue with staffing levels that significantly exceed the schedule we fly," the company said in an email to employees.
- "Sadly, we don’t expect demand to return to anything resembling normal until there is a widely available treatment or vaccine."
- "An extension [of the CARES Act] would be the one thing that would prevent involuntary furloughs on October 1 and hopefully delay any potential impact on employees until early 2021."
The big picture: The coronavirus pandemic has devastated the travel sector — including airlines, hotels, conventions and events. A $25 billion aid package that protects airline jobs expires Sept. 30, but Congress is negotiating another round of stimulus that could extend that relief.