Delta Air Lines CEO Ed Bastian told the Fox Business Network on Thursday that his company might not have to furlough workers because costs are being driven down by employees either opting for earlier retirement or unpaid leave.
“I think we’ve got a shot at having no furloughs once we get to that October 1st date,” Bastian told Maria Bartiromo on her show, Mornings with Maria.
Delta in April was granted $5.4 billion in emergency relief through the CARES Act. The funding restricts the company from furloughing workers until Oct. 1, meaning the company could layoff workers after this date.
So far, workers choosing to leave the company on their own accord have given Delta hope that involuntary furloughs might be avoided. Over 17,000 Delta employees have either opted for early retirement or accepted a voluntary departure package. This accounts for roughly 20% of Delta’s workforce.
In addition, more than 40,000 employees volunteered to take unpaid leaves of absence over the past few months.
These actions have helped to reduce the company’s “daily cash burn rate” from $100 million at the start of the pandemic to roughly $27 million in June.
“The Delta people are stepping up and making a great sacrifice and commitment as we try to downsize the airline in the face of the pandemic,” Bastian said.
However, despite the accomplishments so far, Delta employees Thursday received a memo from Bastian telling them that notwithstanding recent efforts to shrink the workforce the company is “unfortunately still overstaffed” and that company leaders are “investigating every staffing opportunity” to avoid mandatory layoffs.
Options for avoiding involuntary furloughs are insourcing work currently done by contractors and continue to have employees work reduced hours.
“I remain hopeful that by working together and invoking Delta’s legendary spirit of innovation, we can minimize, or even avoid, involuntary furloughs this fall,” Bastian wrote in the memo to employees.
