Recently, hundreds of flights have been delayed, cut, or canceled by major airlines, forcing frustrated travelers to scramble for alternatives just as they head off to long-awaited vacations or important business trips.
While such air travel disruptions have persisted in recent months, airlines have attributed these issues to staffing shortages, unpredictable weather, and operational challenges. Still, for passengers, the timing couldn’t be worse.
In May, American Airlines revealed plans to cut 70 weekly flights from Chicago O’Hare International Airport beginning in August, right at the height of the travel season, due to aircraft mechanical issues that have since been resolved.
Yet, some cancellations remain unavoidable. Most recently, the airline issued travel alerts for Jamaica-bound flights as Hurricane Melissa swept through the region, causing significant delays and cancellations.
In its latest earnings release, American Airlines noted it had navigated “a difficult operating environment due to significant weather events and the FAA technology outage in September and associated ATC challenges” over the past few months.
To counter these disruptions, the company has increased its investments in technology and operating systems to recover from irregular operations in the third quarter and minimize the impact on customers.
“We are continuing our multiyear reengineering the business effort to utilize technology and streamline processes to enable an improved customer and team member experience while driving a more efficient business,” said American Airlines CFO Devon May in an earnings call.
However, those same efficiency efforts appear to include layoffs.
American Airlines reveals layoffs
American Airlines (AAL) is laying off a “small” number of management and support staff, primarily at its headquarters in Fort Worth, Texas. The move is part of a broader restructuring effort aimed at streamlining operations and aligning resources with current demands.
“We remain focused on continuing to invest in areas that support American’s long-term business objectives, and these targeted investments will be made thoughtfully to position our airline for continued success,” said American Airlines to Fox 4.
The company has not disclosed how many employees will be affected or when the layoffs will take place.
However, Aviation A2Z reports that around 4% to 5% of the airline’s total workforce, approximately 5,000 to 6,500 employees, could be impacted. It also notes that IT and administrative roles are among the most affected, with some positions possibly being moved offshore.
Still, all figures remain speculative until American Airlines makes an official announcement.
American Airlines’ new strategy to boost growth
The layoff news follows the release of American Airlines’ third-quarter earnings report for fiscal 2025, during which the company reached a record revenue of $13.7 billion but a net loss of $144 million.
The airline ended the quarter with $36.8 billion of total debt and aims to reduce that to below $35 billion by the end of 2027.
To achieve profitability, American Airlines has been cutting costs, refocusing on sales and distribution, leveraging its loyalty program, and investing in premium travel experiences. These efforts helped reduce operating expenses by 0.1% during the quarter, while premium unit revenue outperformed the main cabin.
“As a result of the investments and process improvements we have made, most mainline work groups are operating at higher productivity levels today than they were in 2019,” said May. “With labor cost certainty through 2027, American is able to focus on our long-term efficiency efforts while executing on our commercial and customer initiatives.”
More Layoffs & Employment:
- Target announces a major change affecting its entire business
- Walmart puts a freeze on one kind of hiring (blame the White House)
- Walmart announces unexpected store closure
However, premium investments come at a high price, and to continue reducing debt, American Airlines may need to trim other spending areas.
The airline has recently launched new amenity kits, improved food and beverage offerings, and continued the rollout of its flagship suite. It’s also installing high-speed satellite WiFi across its fleet and plans to open new flagship lounges in Miami and Charlotte, as well as expand its Admirals Club Lounge.
Concerning employment trends across the airline industry
Research from Harvard Business School notes that relying on layoffs to mitigate temporary economic shifts is often unsuccessful and has hidden costs that make companies less profitable, innovative, and productive over time.
Although American Airlines hasn’t explicitly described the layoffs as a cost-cutting measure, many companies adopt similar strategies during times of financial strain to stay competitive while redirecting resources toward more profitable areas.
Industry-wide employment has also weakened. U.S. passenger and cargo airline employment declined by 0.09% in May 2025 to 1,011,806 workers compared to April 2025, according to the Bureau of Transportation Statistics.
Passenger airlines accounted for 549,931 of those jobs, or 55% of the total number. Despite the downturn, American Airlines added 642 employees.
“While layoffs may provide immediate financial relief, they often incur significant long-term costs that can undermine the very stability and performance they aim to protect,” said Headhunter & Talent Strategist Bryan Blair.
Related: Three low-cost airlines cancel all flights from Mexico to US
