Norwegian Cruise Line Holdings announced furloughs Thursday in an email to staff from the company’s chairman Frank Del Rio.
Del Rio said the company took initial measures to cut costs after the industry shut down on March 13 because of the COVID-19 pandemic. But pausing marketing activities and imposing a reduced-hour work-week weren’t enough.
The furloughs will affect around 20% of the company’s land-based staff. Cruises for the company’s three brands, Norwegian Cruise Line, Oceania Cruises, and Regent Seven Seas are canceled through June 30.
“As voyage suspensions continue to extend however, we are left with little choice but to make additional difficult decisions regarding our current state of operations, and the resources needed to support it, in order to ensure our business is well-positioned when sailings resume,” his email Thursday said.
The company said in an April 27 press release that it is burning through $110-$150 million per month as cruises remain halted. The company has identified around $515 million in cost reductions attributed to deferred payments for new ships, and a reduction in expenses for non-newbuilds.
As of March 1, 2020, the company had $1.8 billion in advanced ticket sales across its three brands. That included $850 million for cruises that have been canceled through June 30, 2020, and $350 million for the remainder of 2020. Bookings for the rest of 2020 are “meaningfully lower” than for the previous year, the company said in a press release this week.
Del Rio’s 2019 compensation totaled $17,808,364, according to the company’s financial statements.
Earlier this month, competitor Royal Caribbean Cruises Ltd. laid of 26% of its staff on land. The company has halted construction on its new headquarters in PortMiami, designed to accommodate its once-expanding workforce. Carnival Corporation has not announced any layoffs.
On Thursday Norwegian Cruise Line Holdings shares closed at $16.40. down 0.06%.
Miami Herald reporter Jimena Tavel contributed to this report.
This story was originally published April 30, 2020 5:36 PM.
