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Delta Cuts Continue With 4,500 Customer Service Jobs : Airlines: The latest round will bring the carrier about halfway to its restructuring goal.

July 12, 1994|From Reuters

ATLANTA — Delta Air Lines Inc. said Monday that it will eliminate 4,500 full-time jobs from its customer service division over the next 12 months, continuing a cost-cutting effort to become more competitive.

The reductions are expected to contribute to the division's goal of achieving $175 million to $250 million in annual savings for the company, the nation's No. 3 airline.

The latest round of job cuts represents about 20% of the customer service unit, Delta spokesman Bill Berry said. The carrier also cut 2,500 jobs last month from its technical operations division--about 20% of that unit--as part of the restructuring.

With the latest cuts, Delta is about halfway to its goal of cutting as many as 15,000 jobs in a bid to lower annual operating costs by about $2 billion by June, 1997. It has said it will save $100 million a year by removing 13 A-310 Airbuses from its fleet. It will also revamp its short-haul operations.

Like other major airlines in the highly competitive U.S. market, Delta has been hit by massive losses in recent years. Its results improved in the most recent fiscal quarter ended April 29, but it still reported a deficit of $77.9 million, about half the prior year's $152.3 million in red ink.

Full-service airlines such as Delta have been forced to cut expenses in order to compete in the low-fare environment.

The company has already said it will get rid of unprofitable routes. Cargo handling, ticket counter customer assistance and other airport operations will be reviewed for trimming.

"We're simply working through the divisions," Berry said. "No division is exempt."

Delta said the job cuts will be made possible by increasing the use of flexible work scheduling and part-time personnel, changing the way some jobs are performed, eliminating unnecessary processes and taking advantage of more outsourcing opportunities.

Delta declined to provide time frames for staff reductions in specific cities, but said that employees will be offered voluntary departure incentives before layoffs are made.

W. Martin Braham, Delta's senior vice president responsible for airport customer service, said reducing costs to make the airline competitive and ensure its survival requires difficult steps.

Delta's stock closed down 87.5 cents at $47.625 in afternoon trading on the New York Stock Exchange.

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