Please ensure Javascript is enabled for purposes of website accessibility

Delta Announces Layoffs of Contractors

By Howard Smith - Mar 16, 2020 at 12:48PM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Amid airline industry capacity cuts due to the coronavirus, the airline is also laying off contract workers.

On Friday, Delta Air Lines (DAL 1.90%) announced overall capacity cuts of 40% over the next few months. This announcement was followed over the weekend by capacity cuts from other domestic airlines including American Airlines Group (AAL 3.55%) and United Airlines Holdings (UAL 2.88%).

Delta CEO, Ed Bastian, sent out a memo to employees on Friday addressing the growing COVID-19 impact on the airline. WSBTV in Atlanta reports that over 800 contract worker will also be affected by the crisis. The contract worker provider, AgileOne, a workforce solutions company, reportedly said the workers will have the opportunity to be placed in other positions in its network. 

airline tarmac employees

Image source: Getty Images.

Industry in turmoil

In his memo to employees, Bastian stressed the magnitude of the situation, saying "the speed of the demand fall-off is unlike anything we've seen – and we've seen a lot in our business." He focused on the need for cash preservation and removing costs from the business. 

Included in the cost reduction plan was the immediate suspension of 100% of Bastian's salary for six months, an overall capacity reduction of 40% for the next several months, along with the idling of as many as 300 aircraft to support the revised schedules. 

The layoff of the contract workers was part of the plan for "substantially reducing the use of consultants and contractors." Also included is the plan to delay the acceptance of new aircraft deliveries as part of an overall goal to reduce capital expenditures by a minimum of $2 billion for the year. 

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

Delta Air Lines, Inc. Stock Quote
Delta Air Lines, Inc.
$29.52 (1.90%) $0.55
United Airlines Holdings, Inc. Stock Quote
United Airlines Holdings, Inc.
$36.44 (2.88%) $1.02
American Airlines Group Inc. Stock Quote
American Airlines Group Inc.
$13.13 (3.55%) $0.45

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning analyst team.

Stock Advisor Returns
S&P 500 Returns

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 07/03/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.