American Airlines warns 25,000 employees about potential job cuts as coronavirus continues to sap demand

American is the latest airline after United and Southwest to warn of layoffs and job cuts.
Image: Airport termin al
Travelers check in at the American Airlines terminal at the Los Angeles International Airport, on May 28, 2020.Marcio Jose Sanchez / AP file

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/ Source: CNBC.com
By Leslie Josephs, CNBC

American Airlines on Wednesday warned about 25,000 front-line employees — close to 20 percent of its workforce — about potential furloughs, the latest carrier to prepare staff for job cuts as the coronavirus pandemic dashes hopes for a quick rebound in travel demand.

The airline also urged employees to take new buyout and early retirement packages to get as many people off payroll before having to involuntarily cut. Airlines are prohibited from cutting jobs or the pay rates of workers through Sept. 30 under the terms of $25 billion in federal payroll support.

The Worker Adjustment and Retraining Notification Act requires employers to notify staff about possible layoffs or temporary furloughs generally 60 days in advance. The workers who have been told their jobs are at risk won’t necessarily be laid off.

Fort Worth, Texas-based American earlier this month said it has around 20,000 more employees than it needs for its reduced fall schedule. CNBC reported earlier this week that the notices were forthcoming.

United last week told close to 36,000 employees ⁠— nearly 40 percent of its workforce ⁠— that they could be furloughed and Southwest Airlines on Monday told staff that the carrier needs passenger numbers to triple by the end of the year to avoid layoffs or furloughs.