American Airlines Firing 13,000 Workers, Will Cut Spending By $2 Billion

Despite increased charges for checked baggage, extra costs for in-flight food & drink and other hidden fees American Airlines announced on Wednesday that it would cut out 13,000 jobs or nearly 15% of its workforce. The plan will include firing 4,600 maintenance workers, 4,200 baggage handlers, 2,300 flight attendants, 1,400 management and support employees and 400 pilots.

The company’s firings come at a time when the countries third largest airline is currently reorganizing under bankruptcy protection. To meet its goals American Airlines needs to cut labor costs by 20% and to reach that goal they will soon begin meeting with the three major unions who provide workers for the company.

As part of the company’s union talks they are suggesting that the organization’s traditional pension plan be dropped for its 130,000 employees and retirees and become replaced with a traditional 401(k) program that allows the company to offer employee contributions.

AMR Corp. (parent company to American Airlines) CEO Thomas W. Horton said on Wednesday that he hopes the company will return to profitability after shedding more than $2 billion in spending while raising revenue by $1 billion per year.

AMR suffered a loss of $884 million during the first nine months of 2011 and then on Tuesday of this week announced a $904 million loss in the month of December alone.

American Airlines has lost $11 billion since 2011 and employees at the company have been preparing for cuts for weeks.

AMR, American Airlines and short-distance provider American Eagle filed for bankruptcy protection in November 2011.

In the meantime customers can likely expect higher prices for American Airlines flights if the company truly hopes to raise revenues by $1 billion in the short term.

Are you surprised by American Airlines’ recent plan to fire 13,000 employees?

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