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Norwegian Cruise Line Holdings cuts shoreside workforce by 9%

Numerous jobs are being eliminated at Norwegian Cruise Line Holdings including some very senior positions as the company acts to rein in costs.

NCLH put the number at 9%.

In a statement to Seatrade Cruise News, the company said: 'In reviewing our business needs, Norwegian Cruise Line Holdings has taken several prudent actions across our business to align with our strategic priorities. After careful consideration, we have made the difficult decision to restructure and rightsize our shoreside workforce, reducing our current and planned shoreside roles by approximately 9%.

'This action is part of a broader and ongoing effort to improve operating efficiencies, including cost minimization initiatives, to strengthen the foundation for sustained, profitable growth.'

Leadership changes at Oceania and Regent that came out today are not related and were part of the succession planning process, the company added.

Wide-ranging cuts

According to multiple sources, the job cuts extend from corporate to brand roles, across departments and range from entry-level to directors, VPs, SVPs and EVP.

One source said some departments were 'gutted.'

'This goes beyond layoffs here and there,' another source said. 'Every key department in the company was impacted, at the most senior level.

'This is a transformational layoff,' he continued. 'This is not like rounding the edges. This is wholesale.'

New presidents at Oceania and Regent

The changes come as two company leaders, Howard Sherman and Jason Montague, president and CEO of Oceania Cruises and Regent Seven Seas Cruises respectively, are moving to special advisory roles at NCLH. They're succeeded by Frank Del Rio Jr. and Andrea DeMarco as presidents of Oceania and Regent respectively.

Among those leaving ...

According to multiple sources, cuts include, at NCLH, Ross Henderson, EVP onboard revenue and destination services; Giovanni Canu, VP energy assets and fleet decarbonization; Alicia Cuervo, VP design, development & construction; Mario Parodi, VP port & itinerary planning; Sandra Weir, VP revenue management - operations, and Kevin Lynskey, director finance management.

Those impacted at NCL include Christine Da Silva, SVP branding and communications. In international: Eamonn Ferrin, VP & managing director international sales; Steve Odell, SVP & managing director Asia Pacific for Oceania and Regent, and Graham Sadler, MD, Regent Seven Seas Cruises UK; and at Oceania Cruises, Isabel Galvan, SVP marketing and Stacy Stone, SVP revenue management.

Early pandemic job preservation

For some months early in the pandemic in 2020, when fleets were shut down and competitors trimmed their workforces, NCLH had preserved shoreside jobs, with US-based salaried employees temporarily taking pay cuts and moving to a four-day week followed by a temporary furlough of about 20% of its shoreside US team and some international offices.

The company took and is taking numerous other steps to preserve and shore up liquidity and as recently as Friday announced it had extended the maturity of $1.4b of its operating credit facility by a year, to January 2025.

Unlike others, NCLH did not shed ships during the pandemic because it had a younger and smaller fleet than major competitors.

Cost concerns

In downgrading NCLH to 'neutral' from 'buy' this week, UBS said NCLH projects fourth quarter 2022 expense to be 46% higher than in 2019, and expressed concerns about whether the company can reduce that to mid-teens growth by next year.

UBS analyst Robin Farley said it's not clear what's driving such high Q4 expense versus 2019 while guidance from Carnival Corp. & plc is for low double-digit growth, and Royal Caribbean Group projects a low to mid single digit increase.