From Iceland – Blue Lagoon sacks 164 workers due to COVID-19

Poppy Askham

164 Blue Lagoon workers have been made redundant as the company grapples with the economic fallout from the COVID-19 epidemic in Iceland, reports Morgunblaðið. These shots follow the recent decision to close the Blue Lagoon until at least April 30.

The Blue Lagoon employed around 764 people in its resort, restaurants and shops, but more than 20% of the staff have now been laid off. 400 of the company’s remaining employees will switch from full-time to part-time to enable them to claim reduced work allowances from the government. The Unemployment Insurance Fund will pay up to 75% of their salary, but workers will still face a considerable drop in their income.

In a letter sent to the workers, Grímur Sæmundsen, CEO of Blue Lagoon, describes the decision as “difficult for us but inevitable given the current circumstances”, reports Morgunblaðið. Grímur then thanked the employees for their “great job” and expressed the hope that many would be rehired when the Blue Lagoon reopens. He concluded his letter: “I have every confidence that we will get through this together,” a sentiment that will likely be a bitter irony for the laid-off workers.

The Blue Lagoon is one of Iceland’s most popular attractions and has seen good profits in recent years. As reported by Kjarninn, the company’s profit in 2018 was 3.7 billion ISK (26.4 million euros) with dividends worth 4.3 billion ISK (30 million euros) made in 2019.

Blue Lagoon’s layoffs reveal the devastating impact of the COVID-19 pandemic on Iceland’s tourism sector, as travel restrictions and fears of infection have all but halted the arrival of foreign tourists to the country. Waves of similar layoffs have been observed at major hotel chains and Icelandair. The government has announced measures to try to help the tourism sector, including digital gift certificates worth ISK 1.5 billion that Icelanders can spend on domestic tourism when the epidemic subsides . Despite these efforts, COVID-19 will undoubtedly have serious long-term impacts on Iceland’s tourism-dependent economy.

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