United Airlines Customer Service Reps Learn That Working From Home Comes With 20% Pay Cut

Last week, United Airlines decided to shutter two of its customer service call centers — one in Detroit and one in Honolulu — but did so without plans to lay anyone off. Instead, these airline staffers could either move to Chicago or Houston to work in a call center, or they could work from home, but with a pay cut.

The Chicago Business Journal confirmed with United that part of the airline’s deal with the International Association of Machinists, is that if these customer service workers are able to work from home, they must take a 20% pay cut.

Assuming those workers don’t quit or make the move to Chicago or Houston, the Journal estimates that this will save United around $3.3 million a year in wages. If some of these workers choose to quit rather than take the pay cut — which the Machinists union believes is the airline’s intention — that’s even more money.

As Crain’s noted last week, analysts believe that United could actually trim its entire workforce by 2,500 people and save $200 million a year. That would get the company closer to its target of shaving off $2 billion by 2017.

The Journal cites airline sources as saying that United CEO Jeff Smisek may ultimately want to consolidate all of the company’s customer service in one center in Houston.

UPDATE: A few hours after we posted this story, United announced that Smisek and two other top execs at the airline had stepped down amid an investigation into United’ potentially overly friendly relationship with the chairman of the Port Authority of New York and New Jersey, which operates Newark International — a major hub for United.