American Slashes 5,000 Job

American Airlines (NASDAQ:AAL) is planning to cut 30% of its management and support staff, a reduction of about 5,000 jobs, because of the toll coronavirus is taking on the business, the company told employees Wednesday.

The airline also started offering buyouts to these employees and said it plans to offer new voluntary leave and buyouts for frontline staff, such as flight attendants, next month, according to a company memo to which the media gained access.

American and other airlines are scrambling to cut costs because of the pandemic’s devastating effect on travel demand, which has pushed them to their first losses in years. While more travelers are taking to the skies in recent weeks than last month, demand is still down more than 80% from a year ago.

Airline executives have said they expect to shrink because of the weak demand, which has also prompted them to park hundreds of jetliners, slash routes and urge employees to take voluntary unpaid or partially paid leave, and in some cases retire early.

Management and support staff will have until the end of June 10 to apply for the buyout and American is offering volunteers a third of their pay through the end of 2020 and five years of travel privileges. Employees that are laid off after Oct. 1 will not receive a severance, according to another company memo.

American had about 130,000 employees as of the end of 2019 and so far, about 39,000 have taken voluntary leaves or early retirement.

AAL shares collapsed 48 cents, or 4%, to $11.50.