Royal Caribbean reveals details of cruise layoffs as Miami-based industry withers
What does a cruise company layoff look like?
At Royal Caribbean Cruises Ltd., a previously announced round of South Florida layoffs came into focus with terminations that went across the board, a new filing shows.
In its federally required Worker Adjustment and Retraining Act notice, published Friday on the Florida Department of Economic Opportunity’s website, the Miami-based cruise line says it eliminated positions including a vice president of architectural design, a senior manager for public relations and a director of digital product.
Royal Caribbean said in its layoff letter that the cuts came after it suspended global cruising operations in March. That was followed by the U.S. Centers for Disease Control and Prevention’s mandate of an indefinite no-sail order for ships with more than 250 passengers and crew.
“This unforeseen situation has impacted our business significantly, and as a result, we find that we must make some difficult personnel decisions,” the company said.
The layoffs occurred at the company’s PortMiami facilities and commenced April 24. They are expected to be permanent, the company said.
The new details come one day after Carnival Corp. confirmed it was cutting more than 1,300 employees across its South Florida workforce. And on Friday, the state of Florida published a furlough notice from Swiss-based MSC Cruises’ affecting 128 employees.
When combined with furloughs announced at Miami-based Norwegian Cruise Line Holdings Ltd. last month, some 2,000 jobs have now been shelved in the region’s $6 billion cruise industry. And the job losses are likely to have a ripple effect. The cruise industry is estimated to employ or support approximately 150,000 jobs in Florida. With about 70% of the state’s industry concentrated in Miami-Dade and Broward, thousands of secondary-industry employers that work with cruise companies, including caterers and cleaning firms, are likely to be affected.
As with other cruise companies, Royal Caribbean has seen its share price plummet about 75% year-to-date. As a result, it has been forced to slash expenses while raising cash. Last month, the company announced it was cutting 26% of its 5,000-strong U.S. workforce, 3,500 of which were in South Florida. In March, the company announced it was eliminating 1,000 contractor positions.
Royal Caribbean now has about $3.4 billion on hand. In a new note to clients, James Hardiman, managing director and leisure analyst at Wedbush Securities, said given its going expenses, the company’s cash pile is enough to last for about 10 months with no new sailings.
But even if sailings were to resume later this year, Hardiman estimates it will take until 2023 for business to return to 2019 levels.
In an email, Hardiman said that if all goes well, headcount could return to those levels before then.
“While I don’t expect demand and pricing to be back to where they were in 2019 until probably 2023, I would think that the majority of the infrastructure would need to be back in place,” Hardiman said.
This story was originally published May 15, 2020 at 4:10 PM.
