AirTran’s already beat-up stock took another big hit today when two firms downgraded AirTran’s credit. The news sent the stock down another 20% to close at a healthy $1.38 per share. The company’s credit rating is now somewhere less than junk.

Apparently the red-ink couldn’t be stopped by just lowering salaries, so AirTran has announced that it will layoff 480 employees. According to the article, 300 of the eliminated are flight attendants and 180 are pilots.

According to an internal memo (corroborated here), AirTran CEO Bob Fornaro told employees that beginning in August, they would be receiving a 10% cut in pay. Bobby claims that the pay-cut is temporary, but leaves himself an ominous out:

“I must be clear that while we are starting with a conservative reduction as we monitor oil prices and industry conditions, we may need to do more in the future.”

Read as: “In six months we’re going to cut your pay more, fire some of you, and continue to treat our customers like cattle.”