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Norwegian cuts salaries, moves to four day work week to control costs amid shutdown

Norwegian Cruise Line, the third-largest cruise company in the world, has announced it is cutting salaries for its permanent employees by 20% and moving to a four day work week for all employees that aren’t customer facing.

The move, first reported by Business Insider, comes as the cruise industry faces an unprecedented global shutdown due to the ongoing Coronavirus pandemic.

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An order from the CDC in the US has banned all cruise ships from operating in American waters, while every major cruise ports around the world has implemented similar restrictions.

Norwegian Cruise Line, along with every other cruise line, has had to put its fleet into hot layup, meaning that the ship’s are anchored or docked around the world with only the crew onboard.

This is the case for Norwegian’s vessel Norwegian Jewel, which is currently docked in Dubai.

The pay cuts were introduced from March 30th, along with the move to a four day workweek, with Friday now made part of the weekend.

In a memo sent by Norwegian to its staff, the line said the new measures would be in place until June 22, depending on “if the environment improves”.

With cruise lines around the world extending their pause in operations, it’s unlikely that Norwegian Cruise Line will have the resources to return to normal by then, especially as most cities in Europe remain under lockdown, while US ports remain closed to cruise ships.

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With the world’s two largest cruise markets closed, Norwegian has little choice but to ride out the storm. The company, which includes cruise lines Norwegian, Oceania and Regent Seven Seas Cruises, announced the immediate pause on all cruises until April 11 in March.

That has since been extended until May 11th and will likely be extended further.

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.

“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, ” said the memo.

“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,” it added.

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