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Carnival Announces Sweeping Workforce Reductions

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Carnival Corporation headquarters

By The Maritime Executive 05-15-2020 03:07:34

Carnival Corporation has become the latest shipping company to announce a sweeping reduction in its workforce as the company’s operations remain suspended by the global health emergency. 

After suspending operations in mid-March, Carnival had initially avoided large-scale workforce reductions similar to those being announced by the other large cruise companies. However, in recent days word had begun to spread in regions such as the U.K. of pending reductions followed by the announcement of the departure of the heads of its Holland America Line and Seabourn Cruise Line brands. 

"Taking these extremely difficult employee actions involving our highly dedicated workforce is a very tough thing to do,” said Carnival Corporation & plc President & CEO Arnold Donald in the press release announcing the actions. “Unfortunately, it's necessary, given the current low level of guest operations, and to further endure this pause.”

The company declined to announce specific targets for the workforce reductions saying, “To further strengthen liquidity, Carnival Corporation, and its brands are announcing a combination of layoffs, furloughs, reduced work weeks and salary reductions across the company, including senior management.”

Operating more than 100 cruise ships worldwide, Carnival reported at the beginning of 2020 that its shoreside operations had an average of 12,000 full-time and 2,000 part-time/seasonal employees. The company also averages 92,000 employees onboard its ships. 

Speculation is that between a quarter and a third of the individuals employed in South Florida, over 800 people, will have their positions eliminated with an additional 500 being furloughed.   Some reports are saying a further 2,000 positions will be eliminated in Seattle, where the Holland America Group is headquartered with the operations of Holland America, Seabourn, and Princess Cruises, while 450 positions will be eliminated in the U.K.-based operations.   

These moves came as many of the brands are continuing to work to process cancellations, future cruise credits, and refunds for the travelers who had reservations for the lines’ future and canceled cruises. Carnival, however, noted that fewer than 38 percent of reservation holders have so far requesting refunds. 

Carnival also noted that they continue to support its travel agent partners by paying commissions on canceled cruises and on future cruise credits when guests rebook.  

Aboard its ships, Carnival Corporation has also reduced staffing levels to essential crew while working to repatriate its crew around the world. Some crew members had returned home on chartered flights while currently the corporation’s ships are also arriving in Europe, Asia, and the Caribbean transporting crew members home. 

In April 2020, Carnival’s competitor Royal Caribbean Cruises had announced that it was reducing its workforce by approximately 26 percent of more than 5,000 shoreside employees in the U.S. 

Norwegian Cruise Line Holdings has also furloughed approximately 20 percent of its shoreside workforce through July 31, 2020, as well as temporarily shortened the work week and reduced work hours with commensurate 20 percent salary reductions for its remaining shoreside employees. 

Most of the cruise lines, including Carnival Corporation’s brands, continue to be under a no sail order from the U.S. Centers for Disease Control that is currently set to last until late July 2020. Carnival’s brands, including Holland America Line, Princess Cruises, and Seabourn, had recently announced that they were extended their cancelations till the fall of 2020. Carnival Cruise Line, however, had become the first operator In North America to announce specific details for a resumption of service. They announced that eight ships based in Miami, Port Canaveral, and Galveston would potentially resume service after August 1, 2020.