- Carnival Corporation has a plan for the next three months that doesn’t include layoffs or pay cuts, the CEO told employees in a video on Monday.
- Directors will see changes to their compensation in a plan that hasn’t been announced yet, according to the video, which was viewed by Business Insider. At other companies, some executives have forgone their salaries or switched to fully stock-based compensation so their salary can be used for other purposes.
- Norwegian Cruise Line Holdings cut pay 20% last week, Business Insider previously reported.
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While cruise lines, hotels, and other travel companies furlough or lay off employees in the wake of the coronavirus, Carnival Corporation’s CEO told employees in a video sent out early this week that he isn’t planning layoffs or pay cuts through June.
In the video, dated March 20 and reviewed by Business Insider, CEO Arnold Donald told staffers they would hear specific updates about any changes to their work situations by Friday. Carnival confirmed the contents of the video to Business Insider.
“What I can tell you is that we have charted a clear course for the next 90 days and that right now we are very encouraged that we’ll be in a position to survive this, even if our operations are ceased for many months. Now obviously there are no guarantees,” Donald said.
The CEO said Carnival’s plan does not include mass cuts in employee numbers or compensation, unlike at Norwegian Cruise Line Holding, which last week announced temporary 20% pay cuts across the entire company. NCL also temporarily moved all of its non-customer facing employees to a four-day work week, and stopped making 401K contributions until at least June 22.
Donald said that changes at Carnival Corporation will primarily impact director-level employees and above, while employees at the manager level and below can expect things to stay mostly the same.
Of Carnival Corporation’s 150,000 employees, there are a couple of hundred people at the director level, one former Carnival employee estimated.
Donald did not say what those director-level changes will be, but said the leadership team believes it has “come up with a mechanism to protect your pay as well, while still meeting the short term needs for cash for the corporation…”
At other companies, including NCL, executives have taken pay reductions, while others like the hospitality company Wynn Resorts have moved to temporary stock-based compensation plans to free up executives’ salaries for other purposes.
Donald’s message came nearly two months after Carnival Corporation, which runs nine brands including Carnival Cruise Line, Princess Cruise Line, and Holland America Line, became the first major cruise company to experience a major outbreak of coronavirus.
On February 1, a guest who had recently been on the Diamond Princess cruise ship tested positive for COVID-19. Of 3,711 passengers and crew on that ship, 712 eventually tested positive for the virus, according to the U.S. Center for Disease Control and Prevention.
The company has since voluntarily paused all cruises until at least April 16. All Princess cruises are on pause for an extended period until May 10. Other major cruise providers including NCL and Royal Caribbean International announced similar temporary pauses to their itineraries until April 11.
Around 421,000 people in America work for cruise lines, according to the Cruise Line International Association.
Carnival Corporation CEO tells employees in a leaked video that there are no mass cuts coming as industry reels from coronavirus pandemic: 'We'll be in a position to survive this' even as operations stop (CCL)