United Airlines Could Lay off 36,000 Employees Despite Receiving $5 Billion in CARES Act Support

On Wednesday, United Airlines released a new memo for employees warning that mass layoffs are likely coming this fall due to the coronavirus pandemic. According to a report by USA Today, the airline estimates that about 36,000 employees will need to be let go unless travel miraculously rebounds. That means the airline will cut about 45 percent of its jobs.

United Airlines is preparing for mass layoffs on or around Oct. 1 if things continue the way they are going. The Chicago-based company said that most jobs would be cut from its front-line workers — the ones with nothing to do as people around the world are not traveling. United employs about 95,000 people in total but expects to lay off mostly flight attendants, airport customer service agents, and gate agents. These groups will make up about 26,000 of the 36,000 projected layoffs.

"After months of aggressive cost-cutting and proactive capital-raising, today we updated employees about a topic we've always dreaded and the action that was always a last resort in the context of this COVID-19 pandemic: involuntary furloughs," read the memo. "The reality is that United simply cannot continue at our current payroll level past October 1 in an environment where travel demand is so depressed. And involuntary furloughs come as a last resort, after months of company-wide cost-cutting and capital-raising."

United laid out its hopes to avoid this catastrophic layoff spree and its contingency plans. It is calling these layoffs "involuntary furloughs," saying that the employees will be recalled if possible when travel demands rise again. In the meantime, they will be left with no income in the midst of a crippled job market.

The layoffs are only delayed until Oct. 1 because of the payroll protection provisions in the CARES Act. United was a huge beneficiary of the coronavirus relief bills passed by the U.S. government, making it all the more outraging to some that the company anticipates laying off nearly half of its staff.

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United reportedly received a $3.5 billion grant from the CARES Act, and an additional $1.5 billion for payroll protection. This payment was meant to stabilize the ailing company — and its industry in general — while flying was not safe. It was supposed to give airlines time to shrink their businesses to meet the new reality of travel in the era of the coronavirus pandemic.

United executives told reporters that the actual final tally of layoffs would be more apparent in late August, and they hope it will be less than 36,000. They are urging employees to accept "voluntary exit programs," if possible.