Carnival Cuts and Furloughs Staff and Pares Salaries to Conserve Cash

Cruise operator Carnival cuts and furloughs staff, pares salaries and takes other action to conserve cash.
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Carnival Corp.  (CCL) - Get Report said Thursday it was taking a series of "extremely difficult" steps, including job cuts and furloughs, reduced work weeks and salary reductions, as the cruise-ship operator struggles under the weight of the coronavirus pandemic shutdown.

The Miami company said the salary cuts included senior management and the actions annualized would conserve hundreds of millions of dollars of cash.

Shares of Carnival at last check were down 9.5% to $11.09.

"Taking these extremely difficult employee actions involving our highly dedicated workforce is a very tough thing to do, " Arnold Donald, president and CEO, said in a statement. 

"Unfortunately, it's necessary, given the current low level of guest operations and to further endure this pause."

The cruise-ship industry has been battered by the coronavirus shutdown. Outbreaks occurred on several vessels.

The company said that last month it completed a successful financing effort with a heavily oversubscribed offering of senior secured notes, senior convertible notes and common stock.

Carnival said that it was continuing to repatriate thousands of crew members who were still on the company's ships to their home countries. 

News outlets have reported on deaths, a hunger strike and disturbances on board cruise ships, including a Ukrainian woman who died Sunday after apparently jumping from the Regal Princess outside the port of Rotterdam.

Last week, Carnival said voyages for Princess Cruises would remain suspended through the end of summer as limited flights and port closures halted the industry due to the coronavirus pandemic. 

The company also said that starting Aug. 1 it planned to resume certain cruises in phases, with a total of eight ships departing from Miami and Port Canaveral, Fla., and Galveston, Texas.

Separately, rival Norwegian Cruise Line  (NCLH) - Get Report on Thursday posted a significantly wider-than-expected first-quarter loss due to the coronavirus shutdown, though future bookings remain strong. 

The company was down 7.8% to $9.51, while Royal Caribbean Cruises  (RCL) - Get Report shares were sliding 6.1% to $32.42.