In a memo that went out to about 11,500 workers, Kate Gebo, United Airlines' head of human resources, said the company's management and administrative team could be reduced by 30% in October after funding from the U.S. government's CARES Act runs out.
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Executives from all of the nation's major airlines have said they expect the severe downturn in passenger demand will stretch into next year, and that it will take years for traffic to return to 2019 levels. So they have all signaled they will need to be smaller long-term. The United statement to its nonunion employees is the first indication from any of the airlines as to how deep the staff cuts will be.
In addition to the future layoffs, the airline is requiring these nonunion workers to take 20 unpaid days off. Some are being asked to work a four-day work week.
"The reality we are faced with, especially heading into what would normally be our busiest time of year, is daunting to say the least," Gebo wrote.
United said in a statement that it had no choice but to make deep cuts, despite the $3.5 billion in grants and up to $6 billion in federal loans it can receive under the CARES Act.
"Travel demand is essentially zero for the foreseeable future and, even with federal assistance that covers a portion of our payroll expense through Sept. 30, we anticipate spending billions of dollars more than we take in for the next several months," said the airline. "That's not sustainable for any company."
The CARES Act comes with the requirement that airlines are not allowed to institute involuntary layoffs or furloughs or reduce pay through the end of September. They are allowed to offer employees buyout packages or request that they take voluntary unpaid or partial paid leaves.
United disclosed last week that 20,000 employees, more than 20% of its staff, have taken voluntary leaves. They also announced it would be offering buyouts and early retirement packages to employees.
It's the latest in a series of memo from United, including one from its chief operating officer telling workers to consider voluntarily leaving the company and one from its chief pilot warning of furloughs.
Gebo also told workers they should consider leaving the company voluntarily.
"At this point, we're planning for an M&A population that will be at least 30% smaller than it is today, with some work groups impacted more significantly than others," she said. "Given the upcoming reductions, I have to ask each of you to seriously consider if choosing a voluntary separation with a robust benefits package might be right for you."