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Southwest Airlines wants workers to take pay cuts to avoid furloughs

Southwest Airlines says it will not furlough any employees for now, despite COVID-19's crushing blow to major airlines.

(CNN) — Southwest Airlines says it will ask employees to take pay cuts to keep their jobs.

In a new company-wide memo obtained by CNN, Southwest CEO Gary Kelly told employees that airline revenue is down 70% and “we will all need to sacrifice more.”

“For our union contract employees, I promised you I would let you know if and when we decide to approach your union representatives for concessions,” said Kelly. “Because of the inaction of the federal government, and the ongoing losses, that time has arrived.”

Kelly said that company leaders will take a 10% pay cut for 2021 and that noncontract employees could face the same. Kelly has pledged to not furlough employees in 2020, but said “we simply cannot afford to continue with the conditions required to maintain full pay and employment.”

Southwest was not among the carriers to furlough roughly 50,000 workers industry-wide when federal pandemic payroll support expired last week. Congress has not acted on the six-month extension of the Payroll Support Program that airlines say they desperately need to reverse just-enacted furloughs.

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“If we’re so fortunate to have the federal government act and extend the PSP through next March as has been proposed, then all these pay-cut efforts will be discontinued or reversed,” said Kelly.

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