Thursday 14 May 2020 2:44 pm

Carnival lays off staff after suspending operations

Cruise operator Carnival has announced plans to lay off staff to conserve cash after suspending sailings due to the coronavirus pandemic. 

Carnival suspended operations of some of its brands in March, but said workforce changes were put on hold “to forestall the financial impact on its employees.” 

Read more: Coronavirus: Carnival shares sink as cruise operator raises equity

At the start of the coronavirus pandemic, two of Carnival’s Princess Cruises ships were struck by the outbreak. The Diamond Princess was moored off the coast of Japan for two weeks in February after 700 cases of the virus were confirmed. 

The Grand Princess was prevented from mooring in San Francisco after authorities learned that some of its passengers had developed coronavirus symptoms. 

Last month, the firm netted $6.4bn of additional liquidity through a combination of senior secured notes, senior convertible notes and common stock. As part of efforts to conserve cash, Carnival  has today also announced layoffs and the furloughing of some staff. The firm will also reduce the working weeks and implement salary reductions.

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Chief executive Arnold Donald 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.” 

Earlier this week, it was reported that up to 450 jobs at Carnival UK’s headquarters could be cut. Staff who kept their jobs are being asked to accept a 20 per cent pay cut until November, according oto the BBC. 

Carnival said it will continue to pay commissions on cancelled cruises and on future cruise credits when guests rebook. 

The travel sector has been hit hard as countries close borders and governments advise people not to go on holiday. 

Read more: Coronavirus: Carnival shares plummet as firm extends cruise suspensions

However, Carnival’s booking trends for the next year have remained resilient despite lockdowns restricting travel. Fewer than 38 per cent of customers have requested refunds to date. 

Donald said: “Our booking trends for the first half of 2021, which remain within historical ranges, demonstrate the resilience of our brands and the strength of our loyal recurring customer base”. 

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