Carnival Cruise Line is taking steps to terminate and/or not renew the contracts of employment of several thousands of officers and crew members throughout its fleet, according to several crew members who wish to remain anonymous.
Today, several crew members provided internal documentation indicating that Carnival is sending as many as 7,000 termination letters to Carnival officers and crew members. As many as eight captains (masters), five staff captains, five guest service managers, six executive chefs and six hotel directors are among the top ship employees who are being laid off. Carnival sent these letters via e-mails to officers and crew members who are at home on vacation or otherwise at home awaiting a vessel assignment if and when the CDC permits cruising from U.S. ports. Carnival plans to make individual calls to follow up on some of the notices of termination.
Carnival terminated the jobs of as many as one hundred and twenty crew members and officers working in the bridge across the Carnival fleet of ship.
A number of crew members who were sent home “on vacation” expressed their frustration that they have not been employed over the last five or six months in the belief that they were needed to be ready to re-join a Carnival ship on short notice. One crew member who contacted our office said “why didn’t Carnival notify me in April so I could find another job? It abandoned me and my family with two small kids without money.”
Last March, Carnival Corporation laid off hundreds of employees due to the coronavirus pandemic. Carnival eliminated and furloughed nearly 1,600 shore-side employees and reduced the compensation of many of those employees who were not terminated.
The current round of terminations represents a little over 20% of the approximately 33,000 ship employees employed on Carnival Cruise Line’s diminishing fleet of ships.
Carnival Corporation recently announced that it was selling as many as eighteen cruise ships from its fleet, including four ships operated by Carnival Cruise Line including the Carnival Fantasy, Carnival Inspiration, Carnival Imagination and Carnival Fascination.
The mass firings are an insight into the state of Carnival’s dire financial affairs. According to a 8-K form which Carnival filed with the SEC last week, Carnival’s cash burn was $770,000,000 for 3Q 2020, which ended with Carnival having only “$8,200,000,000 of cash and cash equivalents.” As of August 31, 2020, “approximately 45 percent of guests affected by the company’s schedule changes have received enhanced FCCs (future cruise credits) and approximately 55 percent have requested refunds.”
“Total customer deposits balance at August 31, 2020, was $2.4 billion, the majority of which are FCCs (future cruise credits), compared to total customer deposits balance of $2.9 billion at May 31, 2020.”
The bottom line is that loyal cruise fans are essentially providing a free loan to Carnival of several billions of dollars. Many of the individuals undoubtedly lost their jobs or financed their cruises in the first place.
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