Carnival is laying off workers and cutting pay as COVID-19 freezes the cruise industry

REUTERS/Mike BlakeCarnival Cruise Line’s Carnival Splendor ship.
  • Carnival Corp. announced on Thursday a combination of layoffs, furloughs, and pay cuts.
  • The company said the moves will allow it to conserve hundreds of millions of dollars while its operations are shut down.
  • All of Carnival’s on-shore employees will be affected in some way, the company told Business Insider.
  • The global spread of COVID-19 has halted new cruises since March.
  • Are you a current or recent employee of Carnival or another cruise company? Do you have an opinion on how your company or the industry as a whole has handled the coronavirus? Email this reporter at [email protected]. You can also reach out on Signal at 646-768-4712 or email this reporter’s encrypted address at [email protected].
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Carnival Corp. said on Thursday that it would undergo a combination of layoffs, furloughs, and pay cuts to preserve cash amid a two-month shutdown caused by the spread of COVID-19. The moves are expected to save hundreds of millions of dollars, the company said in a press release.

Every on-shore employee within Carnival and its nine brands will be impacted in some way by the moves, the company told Business Insider.

Carnival declined to disclose the total number of employees that will be laid off or furloughed or the exact amount of money it expects to save, but said of the approximately 3,000 people who work for the company in Florida, 820 will be laid off and 537 will be put on furlough. The furlough will last for up to six months, with the potential to end earlier for some workers if cruises resume and their roles become necessary. The job cuts are permanent, the company said.

“Taking these extremely difficult employee actions involving our highly dedicated workforce is a very tough thing to do. Unfortunately, it’s necessary, given the current low level of guest operations and to further endure this pause,” Carnival CEO Arnold Donald said in the press release. “We care deeply about all our employees and understanding the impact this is having on so many strengthens our resolve to do everything we can to return to operations when the time is right.”

Earlier this week, Carnival’s UK division began a process that will end in layoffs and pay cuts in the coming months. Carnival had previously reduced pay for executives and some ship-based workers, though Donald told employees at the end of March that the company didn’t intend to cut its workforce through the end of June.

The global spread of COVID-19 has shut down the cruise industry since March, after the disease infected passengers and crew members on a number of ships, including the Carnival-owned Diamond Princess, Ruby Princess, and Costa Luminosa. Carnival’s two biggest competitors, Royal Caribbean Cruises and Norwegian Cruise Line Holdings, have also resorted to layoffs, furloughs, and pay cuts in recent months. Norwegian said earlier in May that it had significant doubts about its ability to survive the next year.

Carnival raised $US6.4 billion in debt and equity in April, and Donald said that month that the company had enough money to survive a scenario in which it earns no revenue for the rest of this year. Carnival plans to return some ships to service in August.

Are you a current or recent employee of Carnival or another cruise company? Do you have an opinion on how your company or the industry as a whole has handled the coronavirus? Email this reporter at [email protected].
You can also reach out on Signal at 646-768-4712 or email this reporter’s encrypted address at [email protected].

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