JetBlue reshuffles corporate headquarters, braces workers for layoffs

  • JetBlue Airways Corp. braced employees for layoffs, buyouts and a broad corporate restructuring.
  • The company called mandatory meetings at its headquarters Friday.
  • JetBlue is trying to reduce costs by $300 million a year by 2020.
A Jet Blue aircraft takes off from Long Beach Airport in Long Beach, CA.
Tim Rue | Bloomberg | Getty Images
A Jet Blue aircraft takes off from Long Beach Airport in Long Beach, CA.

JetBlue Airways Corp. is restructuring its operations and "eliminating a number of positions" through layoffs, buyouts and attrition, spokesman Doug McGraw confirmed Friday.

The low-cost carrier called mandatory meetings at its Long Island City headquarters Friday to lay out the details of the plan following a top-to-bottom review of its organization over the last several months.

The cuts will mostly impact the company's behind-the-scenes operations in New York not flight crews, McGraw said. It's trying to lessen the blow by cutting positions as people resign and offering compensation packages to employees who leave voluntarily, he said.

JetBlue, the fifth-largest U.S. airline by traffic, in December 2016 said it aimed to reduce its operational costs by up to $300 million a year by 2020, including improving maintenance so planes are fixed faster and increasing the use of self-service check-ins and bookings for passengers. JetBlue and its competitors are struggling with higher jet fuel and other expenses, while travel demand remains robust.

"We aimed to reduce the number of involuntary departures by offering voluntary buyouts and by eliminating a number of open positions," McGraw told CNBC. "We need to make these difficult decisions to ensure we are set up for success."

McGraw, who wouldn't say how many positions are being eliminated, said the company's moving some teams and roles into new reporting structures. The cuts are focused on office jobs and the airline is not planning to let go airport workers such as gate agents. It is also not cutting mechanics or flight crews, including pilots, McGraw said. Flight attendants voted to unionize earlier this year.

Outside of JetBlue’s headquarters near Manhattan, one employee said he was called in to the office when he was scheduled to be offsite, while others said they had meetings scheduled throughout the day.

"Some of the changes will be difficult but they are necessary if we want to accomplish our goals," the company said in a memo sent to employees Thursday that was tweeted by aviation blogger Seth Miller.

JetBlue isn't the only U.S. airline trimming staff. American Airlines, the largest U.S. carrier by traffic told staff last month to prepare for management-level buyouts or layoffs, five years after its merger with US Airways.

JetBlue shares were up marginally on Friday afternoon, but are down 11 percent this year. The airline is scheduled to release second-quarter earnings before the market opens Tuesday.

The NYSE Arca Airline Index, which tracks 15 U.S. and international airlines, is down around 10 percent so far this year, while the S&P 500 is up close to 5 percent.