Carnival Plans Job Cuts, Furloughs, Pay Reductions to Save Cash

(Bloomberg) -- Carnival Corp. plans to cut jobs, reduce salaries and shorten work weeks to cope with the pandemic-driven halt of cruising.

The job cuts will include furloughs and permanent reductions, according to a statement Thursday from Carnival, the world’s biggest cruise company. Carnival said the cost-cutting moves, which will also hit senior management, will save hundreds of millions of dollars in cash on an annualized basis.

Like the rest of the cruise industry, Carnival suspended voyages in mid-March after a series of coronavirus outbreaks on ships led to deaths and mass quarantines. Last month, the company netted $6.4 billion from new bonds, senior convertible notes and common stock to help it weather months without customers.

Its flagship Carnival Cruise Line plans to restart some cruises on Aug. 1, with a “no-sail” order from the U.S. Centers for Disease Control and Prevention due to expire on July 24. But much of the fleet has already delayed voyages for longer, and it’s unclear when consumers will be ready to cruise again in large numbers.

“Taking these extremely difficult employee actions involving our highly dedicated workforce is a very tough thing to do,” Carnival Chief Executive Officer Arnold Donald said in the statement. “Unfortunately, it’s necessary, given the current low level of guest operations and to further endure this pause.”

Carnival shares have plunged 76% this year through Wednesday.

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