Miami-based Norwegian Cruise Line lays off 9% of its shoreside workforce

[luv2kroooz]

https://www.seatrade-cruise.com/finance/norwegian-cruise-line-holdings-cuts-shoreside-workforce-9

 

I didn't this coming. Every time I listen to Mr. del Rio on an earnings call or in CNBC, he is talking about how NCLH is experiencing record growth and is on pace to surprise 2019 bookings. Yet, it is reportedly laying off 9% of it's shoreside workforce. 

Edited December 16, 2022 by luv2kroooz

[ChiefMateJRK]

 When I was at Megacorp, a 9% layoff was nothing (unless you were one of the 9%).   It may be that as things return to "normal," there isn't as much need for higher level staff.

[njhorseman]

9 minutes ago, ChiefMateJRK said:

 When I was at Megacorp, a 9% layoff was nothing (unless you were one of the 9%).   It may be that as things return to "normal," there isn't as much need for higher level staff.

No...this is "we're losing our shirts and desperately need to cut expenses". 

When business is "normal" companies hire, not fire .

[ChiefMateJRK]

1 minute ago, njhorseman said:

No...this is "we're losing our shirts and desperately need to cut expenses". 

When business is "normal" companies hire, not fire .

I'm guessing that you didn't spend over three decades at Megacorp??

Edited December 16, 2022 by ChiefMateJRK

[shof515]

i wont be surprised to see NCL removed their call center and replace it with online chat systems like what one airline company recently did

[BirdTravels]

37 minutes ago, luv2kroooz said:

https://www.seatrade-cruise.com/finance/norwegian-cruise-line-holdings-cuts-shoreside-workforce-9

 

I didn't this coming. Every time I listen to Mr. del Rio on an earnings call or in CNBC, he is talking about how NCLH is experiencing record growth and is on pace to surprise 2019 bookings. Yet, it is reportedly laying off 9% of it's shoreside workforce. 

It is called smart business. You need a lean and mean organization to move to the future. And the cuts are described as NCLH,,, which could be viewed as an layer of management above and beyond what is needed to run the day-to-day business of each of the cruise lines. 

[njhorseman]

2 minutes ago, ChiefMateJRK said:

I'm guessing that you didn't spend over three decades at Megacorp??

More than 20 years, and as head of strategic planning I would be the guy working up the numbers and recommendations for the CEO and the board .

[njhorseman]

1 minute ago, BirdTravels said:

It is called smart business. You need a lean and mean organization to move to the future. And the cuts are described as NCLH,,, which could be viewed as an layer of management above and beyond what is needed to run the day-to-day business of each of the cruise lines. 

They also canned the presidents of Regent Seven Seas and Oceania...positions not at the NCLH level but the cruise line operating level. Really familiar name taking over at Oceania...son of the founder.

[luv2kroooz]

17 minutes ago, njhorseman said:

No...this is "we're losing our shirts and desperately need to cut expenses". 

When business is "normal" companies hire, not fire .

Bingo. And these layoffs in the face of Del Rio recent bloviating about record setting bookings, record setting passengers fares, record setting onboard revenue, record growth, 2023 profits well in excess of pre pandemic. Yada, yada, yada. Talk is cheap. The SEC filings tell a different narrative.

Edited December 16, 2022 by luv2kroooz

[BirdTravels]

7 minutes ago, njhorseman said:

They also canned the presidents of Regent Seven Seas and Oceania...positions not at the NCLH level but the cruise line operating level. Really familiar name taking over at Oceania...son of the founder.

Yup. Saw that. If you aren't doing your job, time to clean house.

[luv2kroooz]

Just now, BirdTravels said:

Yup. Saw that. If you aren't doing your job, time to clean house.

I have not seen or read anything (except your comment) that would infer anything about quality of job performance. What exactly are you talking about?

[MoCruiseFan]

2 hours ago, luv2kroooz said:

I have not seen or read anything (except your comment) that would infer anything about quality of job performance. What exactly are you talking about?

 

And you will never see or read that as the statement would IMPLY things, the reader would INFER.

[J0Y0US]

3 hours ago, BirdTravels said:

Yup. Saw that. If you aren't doing your job, time to clean house.

 

So you agree something is broken then and the talk is just that talk.

 

Honestly I view this as them realizing they need to downsize going in to the expected economic climate moving forward.

[Ant@sea]

Also take into account the billions of dollars of debt that they took on over the last 2 years.  This precipitated a reexamination of all areas of the company and they’ve seen where staff is not needed or the need to remove a layer of management if they deem it non essential 

[TrumpyNor]

At this time (2022, soon to be 2023) more and more people do  "everything" in connection with their booking with NCL online themselves - so I am actually not surprised if NCL is "downsizing" their staff at their Miami office. What surprises me is that this didn't happen earlier....

[luv2kroooz]

5 hours ago, MoCruiseFan said:

 

And you will never see or read that as the statement would IMPLY things, the reader would INFER.

Thank you for setting that straight. I see you just corrected someone else's use of the word "need" to "desire". You are our resident English grammar cop....haha! 

 

Poor word usage aside, I think certain situations call for opinion, but I also think certain situations call for factual information. I was trying to make the point to the poster that there was no mention of quality of job performance in the SEC filings, and the poster opining that this is cleaning house due to job performance is factually inaccurate, not to mention slanderous to the impacted employees. Performance based layoffs are not usually disclosed in SEC filings.

 

From the SEC filing...

Item 7.01Regulation FD Disclosure.

 

The Company is undergoing a broad and ongoing effort to improve operating efficiencies, including cost minimization initiatives, to strengthen the foundation for sustained, profitable growth. As part of this initiative, on December 14, 2022, the Company carried out a workforce reduction and rightsizing to better align the Company’s workforce with its strategic priorities and prepare for its future growth, resulting in an approximately 9% reduction in current and planned shoreside roles.

 

 

Finally, the very nature that this was required to be disclosed in an SEC filing via the 8K says something to me and is intended to speak to current and potential investors. The 8K can report good news, but typically does not. Yet, I have seen phrases like "smart move" and "no big deal" being used to describe these layoffs.

 

Anyway, thanks again for the correction. Happy cruising.

Edited December 16, 2022 by luv2kroooz

[LouChamp]

Aloha.  As a shareholder in the big three companies and as I’m sure many

on these boards are also, the three major companies are up to their eyeballs in debt.  They are basically refinancing and restructuring in order to push the debt down the road. While not necessarily too big to fail, if they did they have assets few can afford to buy nor would want so the lenders

need to work with them.  That said, they are cutting back the on board services, staff and general experiences onboard even the most higher end brands.  No matter the glossy verbage they are all in trouble and hopefully they don’t cut back where they start losing long term devoted cruise addicts such as myself and many of us.  Each brand has its own vibrant flavor and when that is diluted in my opinion it continues the downward slope which translates into many not returning and them hoping they attract new blood.  Just my opinion. All the best for a happy and healthy holiday season and new year!

[phillygwm]

10 hours ago, ChiefMateJRK said:

 When I was at Megacorp, a 9% layoff was nothing (unless you were one of the 9%).   It may be that as things return to "normal," there isn't as much need for higher level staff.

 

10 hours ago, njhorseman said:

No...this is "we're losing our shirts and desperately need to cut expenses". 

When business is "normal" companies hire, not fire .

The two aren't mutually exclusive.  Even the strongest companies aren't immune to layoffs and we're heading in to what everyone hopes is a mild recession.  Demand may reduce. 

 

And yes, on top of that, NCL is highly leveraged and would do well to reduce its debt levels, even if bankruptcy isn't anything imminent.

[vswan]

The majority of my business career was as an independent contractor working for a number of small to medium sized businesses. I had a view of what was happening at a  number of businesses, as well as being a resident of a town with several larger businesses. So no, I was not involved in the decisions made by large businesses. But these are my thoughts.

 

In our community we had one company which had a large layoff every 5 years or so. This was generally done after robust hiring. This was their opportunity to cut anyone they didn't want to keep - by either work or cost. The other group often cut was the mid-level and more upper-level people who where more expensive to keep around. They would either cut the position entirely or replace with a lower cost employee. (Not a good reputation for a company to have)

 

Company restructuring has been happening continually for the last decade or more. Sometimes I think it costs more to have someone decide what might work in restructuring only to have to replace the employees they restructured out. Combining departments that shouldn't be, making things more efficient from a cost standpoint, but not from a customer standpoint.

 

Most of my family members who do work at larger companies have been through restructuring - it's what most businesses do - thankfully they have all kept their jobs, but the jobs may have changed.  This is a normal function of business at this point, not just in the cruise business.

 

 

[SeaShark]

Always interesting to see that some folks here aren't able to see the difference between Norwegian Cruise Line and Norwegian Cruise Line Holdings.

[Oakman58]

MERRY CHRISTMAS to those 9% that are being laid off.

[CWMixer]

I'm surprised this took so long based on past 2+ yrs and near term forecasts.

Any successful business of any size has to be continually looking for operational efficiencies and associated cost reductions (including headcount) to remain competitive: their competitors are doing the same thing. 

Meta, WaPo, Amazon recently announced similar significant cuts. 

Do a search on '2022 layoffs': NCL is hardly alone.

[laudergayle]

9 hours ago, Ant@sea said:

they deem it non essential 

Non-essential is good strategic move.  I worked for a multi-brand hospitality company for many years. The individual brands were supported by company wide services, i.e. payroll, accounts receivable, mailroom. You don’t need “world-class” service support, you just need to make certain everyone got their paycheck, the bills were sent out and payments received, etc.  The “essential” is where you cut carefully—Sales, Branding, Marketing, Reservations. These positions generate revenue for NCHL.  

[LouChamp]

2 hours ago, Oakman58 said:

MERRY CHRISTMAS to those 9% that are being laid off.

If you have followed FDR over the years you are correct. He is a legal milkman.  Ran Renaissance into the ground after 9/11.  He is crafty yet his products are good.  Almost like Frank Lorenzo of the airline days. Texas Airlines, Continental.  He brought home millions during Covid and now pits his son in charge. While Ted Arison rest in peace did the same for Mickey the culture and products delivered were different.  That said lets see what happens. 

 

[ChiefMateJRK]

3 hours ago, vswan said:

The majority of my business career was as an independent contractor working for a number of small to medium sized businesses. I had a view of what was happening at a  number of businesses, as well as being a resident of a town with several larger businesses. So no, I was not involved in the decisions made by large businesses. But these are my thoughts.

 

In our community we had one company which had a large layoff every 5 years or so. This was generally done after robust hiring. This was their opportunity to cut anyone they didn't want to keep - by either work or cost. The other group often cut was the mid-level and more upper-level people who where more expensive to keep around. They would either cut the position entirely or replace with a lower cost employee. (Not a good reputation for a company to have)

 

Company restructuring has been happening continually for the last decade or more. Sometimes I think it costs more to have someone decide what might work in restructuring only to have to replace the employees they restructured out. Combining departments that shouldn't be, making things more efficient from a cost standpoint, but not from a customer standpoint.

 

Most of my family members who do work at larger companies have been through restructuring - it's what most businesses do - thankfully they have all kept their jobs, but the jobs may have changed.  This is a normal function of business at this point, not just in the cruise business.

 

 

Bingo.  This is what I was talking about.  Large companies tend to become bloated with low performers and need a periodic purge.  A lot of these companies allowed workers to work from home during Covid and many of those workers are now resistant to showing up in the office.  If there is an across the board reduction mandate, it makes it easy to cut ties with the most problematic and to send a message to others.  It's just the nature of the Megacorp beast.