• Southwest Airlines is cutting costs.
• It's pausing corporate hiring, summer internships, and a team-building tradition.
• The move comes after a dispute with the activist firm Elliott Investment Management.

Southwest Airlines is pausing corporate hiring to cut costs, a company spokesperson confirmed to Business Insider.

The spokesperson said the airline was "pausing all noncontract internal and external hiring."

It's also pausing summer internships. Southwest said it would honor all internship offers already made but would not make new offers.

CNBC first reported the news, citing a memo from CEO Bob Jordan.

"Every single dollar matters as we continue to fight to return to excellent financial performance," he told staffers in the memo.

Southwest said it was also cutting noncore spending, including its staff rallies.

"We are limiting discretionary costs, including holding on the Southwest Rallies for this year, as we focus on reducing costs," the spokesperson told BI.

Southwest Rallies, where senior leaders lay out plans for the year and celebrate accomplishments with staff, have been a team-building tradition since 1985.

"We'll continue to evaluate hiring needs on an ongoing basis to determine when it makes sense for the business to resume hiring," the spokesperson added.

Southwest continues to face pressure from investors over poor financial performance.

The activist fund Elliott Investment Management has been the most prominent voice; in 2024 it called for the airline to replace its CEO and review its business model.

Last July, Southwest said it would ditch its open-seating model and offer some premium-seating options — a departure from its no-frills offering that inspired the budget-airline model.

In October, Southwest and Elliott reached a deal in which Jordan would remain in the top job while Elliott named six directors to the airline's board.

Southwest's stock is up by 13.7% over the past year but down by 40% over the past five years.