United Airlines Could Furlough 36,000 U.S. Workers Despite Billions in Federal Bailout

United Airlines announced Wednesday they plan to furlough approximately 36,000 United States employees, even though they received billions from the federal government.

"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," the airline said in a memo to employees Wednesday.

"This morning, each of our operations leaders communicated directly with their teams to let them know that about 36,000 United frontline employees will be notified, either directly or through a union representative, of potential furloughs on October 1," the airline said in a memo to employees Wednesday.

The potential furloughs include 11,000 employees in airport operations, 15,000 people working in inflight services, and 5,400 workers in technical operations.

Unites Airlines told employees the company tried to manage through the crisis through cost-cutting, such as instituting a hiring freeze for non-essential workers and cutting spending with outside vendors.

"We started aggressively cutting costs across our business in late February...[We] eliminated CEO and president base salaries through the end of 2020 and temporarily reduced officer salaries...[and] suspended raises and implemented a schedule reduction for management and administrative employees," the airline said, adding that they also offered unpaid voluntary leaves of absences, which over 20,000 employees took advantage of.

In addition to cost-cutting, United Airlines also received $5 billion in federal aid under the CARES Act – $3.5 billion was a direct grant and $1.5 billion was in the form of a low-interest loan. Due to provisions in the CARES Act, United Airlines must wait until October 1 before it begins layoffs. The airline raised another $10.8 billion through private loans.

"Throughout this crisis, we have been honest and direct with you about our need to right-size our work force to match travel demand. For months, we have said that our airline, and our overall work force, needed to be smaller than it is today," the airline stated.

Newsweek reached out to United Airlines with questions on the furloughs, but they declined to comment and referred Newsweek to the memo.

United Airlines reported 16.8 percent loss in operating revenue for the first quarter in 2020 on April 30. They had roughly $8 billion in revenue for the first quarter to cover nearly $9 billion in operating expenses.

Oscar Munoz, the chief executive officer at United Airlines, said in a statement on April 30 the company "led the industry in taking decisive steps" during the novel coronavirus pandemic.

"While we are still in the midst of this crisis, we will not hesitate to make difficult decisions we believe will ensure the long term success of our company. When demand returns, we believe we'll be positioned to bounce back strongly and quickly because of our early and aggressive efforts to fight the worst financial crisis in aviation history," Munoz said at the time.

United Airlines
The United Airlines terminal at San Francisco International Airport on July 08, 2020 in San Francisco, California. United Airlines has sent layoff warnings to 36,000 of its front line employees to give them a 60 day notice that furloughs or pay cuts could occur after October 1. Justin Sullivan/Getty