UAL shares up 50%, plans 5,500 more job cuts Posted on July 22nd
UAL Corp. shares have jumped more than 50 percent this morning despite a big second-quarter loss, after the United Airlines parent announced an agreement to strengthen its cash position and announced plans to deeply slash its workforce.
The Chicago airline holding company reported a punishing $2.73 billion loss for the second quarter Tuesday, as big accounting-related charges combined with soaring fuel costs to push the it into the red. Excluding the king-sized charges, however, UAL — following in the footsteps of rivals such as American Airlines and Delta — turned in a loss that wasn’t as bad as the deficit for which Wall Street had been bracing.
As part of its effort to cut costs, UAL said Tuesday that in addition to the 1,500 salaried and management job cuts that it announced during the second quarter, “the company now expects to reduce its frontline workforce by more than 5,500 employees by the end of 2009.”
That additional 5,500-person reduction in its workforce represents a much more dramatic cut than most experts had been expecting.
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