Last night I broke the news exclusively that American Airlines would shed at least 30% of management and support staff, and I outlined the two voluntary packages being offered to most employees and what the involuntary package would look like.
A couple of correspondents – a throwaway account on Twitter, an anonymous email – complained to me that the airline had to move up their notice to employees because I had the scoop. They weren’t going to inform staff of the layoffs last night. Since then these planned layoffs have been reported broadly.
Here’s the full internal message that’s been shared from Elise Eberwein, American’s Executive vice president – People and Communications, with the airline’s managers and support staff.
May 27, 2020
Management and support staff (MSS) team:
Since the start of this pandemic, each day has brought a new challenge. Our team has tackled every obstacle with incredible tenacity while staying true to our mission to care for people on life’s journey. While navigating this pandemic, we are committed to three goals:
1. Ensuring adequate cash to weather the downturn;
2. Reducing our cash burn by removing as much expense as possible; and
3. Restoring confidence in air travel.Although our pre-pandemic liquidity, the significant financial assistance provided by the government, and the cash we’ve raised in the capital markets provide a foundation for stability, we need to reduce our cost structure, including our most significant expense — the cost of compensation and benefits. And we must plan for operating a smaller airline for the foreseeable future.
We have already taken steps to prepare for this new reality, with nearly 39,000 team members electing to take a voluntary leave or early retirement. Fleet retirement accelerations are underway, and we will fly roughly 100 fewer aircraft next summer — mostly widebodies — than we had originally planned. Additionally, running a smaller airline means we will need a management and support staff team that is roughly 30% leaner.
A more efficient leadership team begins at the top, and we are restructuring all levels around key future leaders and functions, beginning with our officer team. We will announce a reorganized officer team soon, and those leaders will be restructuring at the next levels shortly thereafter.
In addition to the plans to reduce our MSS team by 30%, we are also announcing other cost-saving measures. These include:
• Suspending the 2020 MSS merit program;
• Requiring MSS to take 50% of their vacation by Sept. 30 and suspending the vacation rollover policy so that no unused vacation days roll into 2021; and
• Canceling the 2020 L5 and above short-term incentive plan, which was scheduled to pay a portion of the target as a result of meeting operational metrics.As part of creating a more efficient management structure, we are opening a new voluntary early out program for MSS team members. Details can be found on Jetnet here, and the window to volunteer will remain open through the end of the day on June 10.
Once volunteers are known, leaders will then finalize the remainder of their go-forward MSS teams. If there are not enough early out volunteers, we will have to take the difficult step of involuntary separations. Those decisions will be communicated in July, though impacted team members will remain on payroll through Sept. 30, 2020, and will receive full pay and benefits through the expiration of the CARES Act Payroll Support Program. While no severance will be paid, in addition to full pay through September, we will also provide these team members with one year of D2R travel status as well as access to COBRA health coverage for 18 months. We offer this transparency and timing so those who may be impacted can make the best decision for themselves.
Once we ensure we have the right size and structure in place for our MSS team, we can begin the work for our frontline team, recognizing that we will be a smaller airline, with fewer routes and fewer flights. While we are still working through the details of our future schedule, we plan to open a new voluntary leave and early out program for frontline team members in June. We will have additional details on these programs in the coming weeks. As we have previously stated, our preferred outcome is to properly size our frontline team for the future without having to implement involuntary furloughs. This is a goal, though, not a commitment, and a stretch goal at that. We will be working with our unions in the weeks and months ahead in hopes of developing programs to facilitate that goal.
In difficult times it is even more important that we stay true to our purpose of caring for people on life’s journey, even when that journey is a very difficult one. There is no doubt this is going to be a painful time for all, especially for our departing colleagues, who have given American Airlines their all and are leaving through no fault of their own. They deserve our respect and gratitude. Most of all, they are owed our renewed commitment and our collective effort to return American to profitability and growth as quickly as possible.
Thank you,
You broke the news from a leak and it’s obvious you have someone inside at AA that sent you proprietary information (screen shot) that was meant to be sent to employees today. It wasn’t an exclusive story, it was a leak. Why didn’t you just wait for AA”s official announcement and publish like everyone else? Employees had to hear from you, an unauthorized source, instead of their company and that’s unfortunate. Whoever leaked this to you should pay the consequence and you should know better as an ‘industry leading blogger’. My respect for you and your blog has been tarnished.
It is pretty sad how proud you are to have leaked this story… Think of the people who had to find out they may not have a job via your article. Absolutely shameful. This quarantine has been very stressful for all of us, especially those still flying, unlike yourself. You have lost a reader, and I am very disappointed. You are better than this…
completely off topic, but that has to be the worst signature i’ve ever seen. what a ride it must be to get a memo like that and see what looks like a smashed spider at the bottom of it
Yikes…even for those that stay no vacation rollover. With such drastic changes how did Parker ever think they could avoid even furloughs??? He truly is clueless about this.
I don’t think MSS workgroups have ever been “allowed” to rollover unused vacation time. I was employed at AA (US prior), and it was always a use it or lose it policy. Occassionally, you could work it out with your Manager to “roll” unused days but that was certainly not company policy and off the record.
My two cents, thanks.
They are touting that they will provide access to COBRA coverage for 18 months, meaning the disengaged employee picks up the health insurance tab. Having previously paid for COBRA, its usually no real deal. One can find group insurance or Obamacare for a lot less imho.
Then they say “no vacation rollover”. Unless they cut a check for the balance, that practice is illegal in states like California.
I understand that from a journalist’s point of view, it is obviously sensational to share news like this and “leak” company’s private information. From the perspective of one of the affected employees, I see it as highly disrespectful and insensitive. While I enjoy your blog and your wit, I’m disappointed at the lack of compassion towards already heart-broken employees, who actually do care for the company and the business.
Thanks…
I wonder if it has changed where a retiree has lifetime D2 benefits. That could take the sting out of retiring early for me. Obviously 100% of the MMS team should be let go immediately and replaced with any credible candidates from other airlines. Just as I thought getting upgrades was going to be easier, I see that there will be a lot of competition from the D2’s who have nothing better to do than travel. AA treated me like crap for the last 18 months and I will always be bitter about their lack of service, delays and cancellations, so any changes in personnel are a welcome sight.
As far as jumping any gun on releasing this document, I have to think that if this guy can get a copy, the MMS team has already seen it as well.
That employees subject to a termination program find out about their termination program via a blog a bit before their employer is on the employer and I don’t see what harm the leak does to the employees who may be in the firing line of their employer.
If anything, employees who — courtesy of a leak — find out sooner than later about their employer potentially having them in the firing line may do the soon-to-be-terminated employees a favor.
Govt needs to pull back money equal to each early outs pay as they are basically telling them if you don’t quit early we are going to f*ck you later.
For any American Airlines employee considering early out do not trust Parker. Many retirees accepted early retirement with the promise they will continue with D2 travel. Parker came from US AIR down graded this promised benefit.
That is a very unique signature!!!
@mark Johnson. You are the typical person that when they don’t get what you want, you complain and whine because it didn’t go your way. I know there are lots of bad employees but you can’t assume everyone is like that, that only shows how closed minded you are. There are other airlines you can fly. Before you say anything yes I’m an AA employee, I do my job with pride, I hope you will never be in situation like the one we are right now.
If you all are so troubled that this was posted, take your eyes and go elsewhere. No one is forcing you to read this blog that you are so upset about. Learning that this was coming a day or hours earlier enabled all those who might be impacted to have more time to digest the news and process it. Coming from this blog or those “wonderful execs at AA” who care so much for their employess that they sugested they never needed to worry about employment again, what’s the difference? You think they were going to be in a huge employee meeting to hear this news? You think their manager (who also might be impacted) was going to sit them down 1:1 and tell them this news? No, it was goign to show up in their inbox just like this did. This blog and others like it provide some information that might otherwise not be available (in the same form) to employees, so get off your horse for a while Boomer or Snowflake, which ever you represent, and give us all a break with your outrage.
AA was and is a faithfully company that treated and treat employees for years. We shouldn’t see what they’re doing now wrong. We should blames the COVID-19 Pandemic which came from China sorrowfully. China is the one to blames for what we’re going through here in America. May God bless American Airlines as well May God bless America. Thank CL
I see Parker flies Southwest.