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Royal Caribbean Reduces Workforce By 26% Of More Than 5,000 Shoreside Employees

Royal Caribbean Cruises Ltd. (RCL) said Friday that it has reduced workforce by about 26 percent of more than 5,000 shoreside employees in the U.S, and significantly reduced ship operating expenses. The move has reduced operating expenses during the suspension of its global cruise operations.

It suspended travel for shoreside employees and instituted hiring freeze across the organization.

The company estimates that its average ongoing ship operating expenses and administrative expenses is about $150 million to $170 million per month during the suspension of operations.

The company said it may seek to further reduce this average monthly requirement under a prolonged non-revenue scenario.

As part of the global containment effort, the company suspended its global cruise operations from March 13 through at least June 11, 2020. Continued disruptions to travel and port operations in various regions may result in further suspensions, the company said.

The company had $2.4 billion in customer deposits, as of March 31, 2020. This includes about $0.8 billion of future cruise credits related to previously announced voyage cancellations through June 11, 2020.

The company said it also continues to take future bookings for 2020, 2021 and 2022, and receive new customer deposits and final payments on these bookings.

As of April 30, 2020, the company had liquidity of about $2.3 billion all in the form of cash and cash equivalents. On May 4, 2020 the company increased the 364-day senior secured credit facility and drew $150 million, further enhancing the Company's liquidity profile.

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