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The budget airline will consolidate operations at LaGuardia.
The airline is making the change in response to problems with Boeing's 737 Max plane, which makes up a large portion of the Southwest fleet.
The passenger jet has been grounded since March following two crashes that resulted in the deaths of more than 300 people.
Southwest officials said they had expected capacity to grow by five percent, but it has instead dropped by two percent.
"The financial results at Newark have been below expectations, despite the efforts of our excellent Team at Newark," Southwest CEO and Chairman of the Board Gary Kelly said in a statement.
"I am grateful to our wonderful Newark Employees, who are a top priority, and will be given an opportunity to relocate to another station in our system, including LaGuardia Airport, where we are experiencing strong Customer demand. As part of this move, we will offer options and flexibility for Customers to recover planned travel from other area airports."
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