- Norwegian Cruise Line will cut salaried employee pay by 20% in response to the coronavirus outbreaks, according to a memo sent to staff on Wednesday.
- The salary cut will go into effect on March 30, and last until June 22 if the business starts to rebound, according to the memo, which was obtained by Business Insider.
- Norwegian Cruise Line Holdings, which includes the cruise lines Norwegian, Oceana Cruises and Regent Seven Seas Cruises, announced last week that it would stop all cruises until April 11.
- The stock was down 28% percent on Wednesday following weeks of carnage in response to the global pandemic which has put the cruise industry on hold.
- A spokesperson for Norwegian Cruise Line said the changes will only impact shoreside employees in the United States.
Norwegian Cruise Line announced a major revision to its compensation structure on Wednesday to address cuts to its revenues caused by the coronavirus, which has sent a shock through the cruise and travel industries as the world goes into high alert over the pandemic.
NCL will reduce salaried employees’ pay by 20% on a temporary basis starting March 30, according to a memo sent to staff members on Wednesday. The company will also move to a four day work week, Monday to Thursday, for any employees that aren’t customer-facing, and will pause all 401-K matches.
The changes are set to go into effect until June 22, “if the business environment improves,” according to the memo.
It’s unclear whether employees who normally work on ships have seen any changes to their contracts, which in the cruise industry often last six to 10 months and include room and board.
"As Frank relayed in Monday's Town Hall, the fluidity and severity of the environment caused by the COVID-19 coronavirus outbreak will require us to be nimble and to adapt to situations that arise in order to make it through these challenging times, " the memo reads, referencing comments made by NCL CEO and president Frank J. Del Rio.
"Part of adapting is making sacrifices and difficult decisions in order for us to stretch the liquidity that we have to make it through the voyage shutdown and beyond. We want to do this as much as possible to make it through together as a team, and we are thus implementing the following changes to our compensation policy," NCL said in the memo.
A spokesperson for NCL confirmed the changes in an email to Business Insider late Wednesday, and said it will only impact shoreside employees in United States. The company hasn't made any decisions about international teams.
"As a people-first organization, this decision was not taken lightly. We remain committed to our team members and value their loyalty, passion and determination as we navigate this global situation," the spokesperson said.
Last week, NCL, which includes cruise lines Norwegian, Oceana Cruises and Regent Seven Seas Cruises, announced the immediate pause on all cruises until April 11.
The stock, which hovered near $60 per share in January, dropped 28% in trading Wednesday to around $7 per share.
If you're an employee in the cruise industry, we want to talk. Contact this reporter at [email protected], or DM on Twitter at @beckpeterson.
