Royal Caribbean Cruises to cut 400 jobs in major cost-cutting programme

Royal Caribbean Cruises is to shed 400 shoreside jobs as part of a major cost-cutting programme to save US $125 million a year.

The news, outlined in its second quarter earnings results, does not specify which shoreside jobs are at risk and whether any of these are UK-based.

The company, which also plans to discontinue some non-core operations such as The Scholar School, an educational partnership aimed at college students studying abroad on cruise ships, says it will incur charges of around US $15 million for the restructuring in its third quarter results.

Chairman and chief executive Richard Fain blamed increases in fuel costs for the cuts.

He said: “Too much of our profitability is being eroded by the increase in fuel prices. This is unacceptable and we are evaluating everything we do to find ways to do it more efficiently and effectively.

“While our brands continue to attract premium prices even in this difficult environment, it is imperative we find ways to reduce our costs.”

He added: “This is a difficult period for virtually all businesses, but we are determined to improve our operating results through tight cost controls while preserving our guest experience and continue to strongly support our travel agent partners.”

The company’s second quarter net income was US $84.7 million, down on US $128.7 million for the same period in 2007. But its net income for the first six months of this year was US $160.4 million – higher than 2007’s US $137.6 million.

Despite a worsening economic climate, the cruise company said net yields are expected to be up by 3% to 4% for the full year, and said forward bookings for 2009 are strong.

Chief financial officer Brian Rice added: “Although pressure on the consumer persists and there is much uncertainty in the market, demand for our cruises and onboard spending continues to be resillient.”


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