American Airlines plans manager layoffs, buyouts to slim down 5 years after US Airways merger

Key Points
  • American Airlines is planning to cut jobs and offer buyouts to reduce its headcount.
  • The cuts come about five years after its merger with US Airways.
  • American Airlines is the world's largest airline.
An American Airlines plane at Miami International Airport.
Mark Elias | Bloomberg | Getty Images

American Airlines is preparing for some management-level layoffs and buyouts in an effort to slim down five years after its merger with US Airways, the airline told employees on Tuesday.

"As a result of the integration work required, American has more director and above leaders than we require for the long term," said a note seen by CNBC to employees signed by CEO Doug Parker and American's president, Robert Isom.

American Airlines had 126,600 full-time equivalent employees at the end of 2017, a 3.5 percent increase from a year earlier.

Marketing, information technology and revenue management could be among the affected departments. American's unionized pilots, flight attendants, mechanics or the airline's other customer-facing positions, which make up most of its workforce, are not part of the process, the company said.

Reached by CNBC, an airline spokesman declined to say by how much the airline wants to reduce its headcount.

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Employees at the director level or above will be offered severance packages, but the airline said some of its managers will be let go.

American said that there could be other layoffs.

"While much of this restructuring will happen at the director and above level, we will also take the opportunity to look at our non-frontline facing management structure," the note said. "The majority of improving efficiency at those levels will happen through the elimination of open positions and attrition. However, as leaders take the time to look at their organization, there is the potential for some involuntary departures as well."

American's stock is down more than 20 percent this year, and, like other airlines, the company is trying to keep a lid on costs after a surge in fuel prices. Competitor Delta Air Lines' stock is down 4 percent in 2018, while United Airlines has gained 8 percent this year.

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