United Airlines (NASDAQ:UAL) on Wednesday said it is warning about 36,000 front-line employees — more than a third of its staff — about potential furloughs as the coronavirus pandemic continues to roil travel demand.
The potential for the mass job cuts, the largest announced by a U.S. airline so far, comes as signs of a recovery in air travel fade with new coronavirus infections and travel restrictions. Other airlines have warned employees about possible staff reductions and are likely to follow suit with similar formal notices in the coming weeks.
Federal law requires employers to give staff notice about possible layoffs or temporary furloughs 60 days in advance. United and other airlines that took $25 billion in federal payroll support are prohibited from laying off, furloughing or cutting the pay rates of staff until Oct. 1.
In a memo sent to employees Wednesday, United said workers who are informed that their jobs are at risk might not ultimately get furloughed. The company said it will exhaust voluntary measures before cutting employees.
Some of the furloughed staff may be called back to work but that will depend on a return to demand, which some industry executives say could take years.
The furloughs would apply to unionized workers and warnings are going to some 15,000 flight attendants, more than half of the airline’s cabin crew, and more than 2,200 pilots.
The airline also said more than 4,500 mechanics and technicians as well as more than 11,000 airport operations staff will receive
Worker Adjustment and Retraining Notification Act, or WARN, notices.
Shares docked 96 cents, or 3%, to $31.57.
