Royal Caribbean axes 400 jobs as downturn bites

Royal Caribbean is axing 400 jobs as part of a US$125 million cost-saving programme. The announcement comes as the cruise company unveiled lower-than-expected second quarter earnings.
“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,” said Richard D. Fain, Chairman and Chief Executive Officer. “While our brands continue to attract premium prices even in this difficult environment, it is imperative that we find ways to reduce our costs.”

As part of the restructuring, the company announced it is eliminating approximately 400 shore-side positions. In addition, the company announced it had discontinued some non-core operations, including The Scholar Ship, an educational partnership aimed at college students studying aboard cruise ships. The company expects to incur charges related to this restructuring of approximately $15 million, or $0.07 per share, in the third quarter 2008.

Despite the worsening economic environment, the company posted a rise in net income, up to US$160.3 million for the first half of 2008, compared to US$137.6 million for the same period last year.