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Carnival Corporation lays out redundancy plan

Carnival Cruise Line confirms plans to return to guest operations from Port of Galveston

Carnival Corporation has laid out the company’s redundancy plan, which will include a combination of furloughs, salary reductions and reduced hours.

The company has said these moves will contribute “hundreds of millions of dollars in cash conservation”.

The parent of Carnival Cruise Line, P&O Cruises, Cunard, Princess Cruises, Holland America Line, Seabourn, Aida Cruises and Costa Cruises suspended its sailings in March.

Last month, the company completed a successful financing effort with an offering of senior secured notes, senior convertible notes and common stock, netting $6.4 billion of additional liquidity.

In a statement, Carnival Corporation said: “To further strengthen our liquidity position in the event of an extended pause in guest operations due to Covid-19, Carnival Corporation and our brands are instituting a combination of layoffs, furloughs, reduced work weeks and salary reductions across the company, including senior management.

“The actions in some way affect every shoreside employee in Carnival Corporation and its brands and involve a wide range of professional and skilled employment functions. Job eliminations are permanent.

“The furlough notice is six months, and we have the ability to potentially bring people back from furlough ahead of that time.

“The majority of impact in the US will be in corporate and regional headquarters locations in Florida, California and Washington state.

“We will report the number of impacted employees to authorities in those states as required by law, but at this time we are not discussing details of how many total people were affected globally.

“Outside the US, the timing and nature of these actions vary based on the regulatory requirements in each country.

“However, to provide some context, in Florida there are 820 positions being eliminated out of a workforce of roughly 3,000 employees, with another 537 employees being placed on furlough with the ability to potentially return those employees to the workforce once we resume cruising.

“While these moves will contribute hundreds of millions of dollars in cash conservation on an annualized basis, we are saddened by these decisions and are sorry that we must take these actions.

“Our employees are the foundation of our company and it is unfortunate that many talented people are being impacted, through no fault of their own.

“These measures are in addition to a successful financing effort completed in April with a heavily oversubscribed offering of senior debt, convertibles and common equity, netting over $6.4 billion of additional liquidity.

“Additional actions include ongoing efforts that began in March to tighten down to only necessary expenses and defer most capital expenditures.”

Carnival Corporation president & CEO, 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.

“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.

“We look forward to the day when many of those impacted are returning to work with us and we look forward to the day, when appropriate, that once again our ships and crew are delighting millions of people at sea and we can be there for the many nations and millions of people who depend on the cruise industry for their livelihood.”

This update comes following Carnival UK’s announcement on Tuesday (12 May) that it plans to make a large number of redundancies in Southampton.

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