Posted By RichC on September 22, 2005
Delta Airlines, the nation’s third largest, is planning to cut 7,000 to 9,000 jobs and reduce domestic capacity by 15% to 20% as part of a restructuring plan. Management is hoping that this will save the airline $3 billion a year and help reduce debt while under the protection of bankruptcy.
Delta stated in June that it had 65,000 employees but has recently commented that total number of employees was 52,000. The Chief Executive, Gerald Grinstein, said that the plan calls for cutting up to 9,000 jobs by the end of 2007. The company will lower management salaries, by 25% to 15% and force the remaining staff to take a 7 to 10% pay reduction.
This new round of ‘bankruptcy restructuring’ cuts is on top of the roughly 24,000 that Delta has already eliminated since the terrorist attack in 2001.
Mr. Grinstein was quoted as saying that his goal is to “save Delta in the near term, so that it can compete and win in the long term.” He said the effort will protect Delta from the threats posed by its competitors and make the company profitable in just over two years.
The airline has lost $10 billion dollars since January 2001 and as is the case with all airlines has been hampered by the high price of jet fuel.