• The founder behind the "never-ending" cruise told Business Insider that problems piled up this year.
• The Iran war sent fuel prices soaring. Then Villa Vie spooked passengers by asking them for loans.
• Now founder Mikael Petterson says he is considering bankruptcy.

A financial whirlpool sucked the "never-ending" cruise under.

The founder behind the Villa Vie Odyssey told Business Insider that the Iran war fuel-price surge was the beginning of a "cascading effect" that led the cruise to shut down this week. Mikael Petterson, Villa Vie Residences' founder and executive chairman, said he's considering bankruptcy.

Villa Vie sold permanent cabins at prices ranging from $119,999 to $439,999, promising residents an endless cruise with stops at more than 400 ports of call and a global circumnavigation every three-and-a-half years.

Here are five business problems that brought the trip to an abrupt end.

1. Fuel prices soared.

In February, the United States and Israel launched a war in Iran. Fuel prices surged. The Odyssey uses marine gas oil, or MGO.

Villa Vie had typically paid around $600 or $700 per metric ton for the Odyssey's fuel, Petterson said. By March, the price of MGO in Singapore had soared to nearly $2,000 per metric ton, according to data from Ship & Bunker, a trade publication.

2. The company was too small to hedge.

Some publicly traded companies, like Norwegian Cruise Line Holdings, have told shareholders this year that they have taken measures to blunt the impact of fuel-price volatility. Unlike larger cruise lines, Villa Vie didn't have the scale to absorb the higher prices, Petterson said.

"They're able to hedge and take away some of that risk, but we're too small of a company to do that," he said.

The ship changed its itinerary to spend more time docked at ports and conserve fuel, but it wasn't enough, Petterson said.

3. Villa Vie spooked its own passengers.

In April, Villa Vie wanted residents to help shore up its finances. The company asked them to loan Villa Vie money, offering them interest rates of 12% to 24%, according to a letter viewed by Business Insider.

Some residents got "scared," Petterson said. They sold their cabins to other people who wanted to live aboard. That made things more difficult for Villa Vie's sales team, which was still trying to find buyers for the remaining vacancies on the ship, Petterson said.

4. The company's reputation was damaged.

Some of the Odyssey's residents were content creators. In Substack posts and YouTube videos, they posted about their experiences, some positive and some negative, for the roughly two years that it sailed the world.

Some travel bloggers and social media posters blamed Villa Vie's management for the operation's financial troubles. The negative publicity made it harder to bring more people aboard, Petterson said.

5. The company struggled with cash flow.

The ship's original launch in 2024 was delayed for four months while mechanical problems — including issues with the aging ship's rudder — kept the ship stuck in dry dock. Preparing the ship for launch cost $15 million more than what Villa Vie had expected, Petterson said.

He said the operation was on track to get to break-even cash flow by the second quarter of this year — but the Iran war blew up that plan.

• A "never-ending" cruise was halted because of soaring fuel prices. Its founder blames the Iran war.
• Mikael Petterson says he's considering bankruptcy for his company, Villa Vie. "I feel awful."
• He says residents began to jump ship when the company asked them for emergency loans.

The founder of the "never-ending" cruise that stalled in Cambodia told Business Insider he's doing his best to right the ship.

"I feel awful," Mikael Petterson said when reached by phone Wednesday. The vessel's evicted residents are "counting on me to make the decisions here, and there's nothing else I'm focused on."

After a stormy two years at sea, he had a plan last week to keep the ship's finances afloat, he said.

With his company, Villa Vie Residences, Petterson had promised a new way of life: People could spend six figures to purchase one of 509 cabins on a luxury cruise ship called the Odyssey, and sail around the world for the rest of their lives.

Reality was different. Unexpected mechanical problems delayed the ship's launch for months. Some passengers were unhappy with their cabins. Then the war in Iran sent fuel prices soaring. Residents began to jump ship.

That began a financial whirlpool that sucked the ship under. The price surge was the beginning of a "cascading effect" that led Villa Vie to shut the Odyssey down on Tuesday, Petterson said. The company told passengers living aboard to leave the ship within hours.

"Nobody that's tried residential cruising has succeeded, and we've gone further than anyone else," said Petterson, Villa Vie's founder and executive chairman. "But I think we would have been absolutely fine — and we would have seen this through — if there was no Iran war."

Until last week, Petterson said, he was in talks with a potential investor and was expecting a new infusion of cash. When the deal fell apart, he said, the company was out of options. Now he's considering bankruptcy. He said he understood why residents said they felt shocked and heartbroken.

"I'm the villain in the story, but I'm doing everything I can to support the residents on a solution," he said.

A turbulent launch

The Villa Vie Odyssey was supposed to set sail from Belfast in May 2024. But it wasn't yet seaworthy.

Villa Vie Residences had retrofitted the three-decade-old ship and sold permanent cabins at prices ranging from $119,999 to $439,999. The company's pitch to residents was an endless cruise with stops at more than 400 ports of call and a global circumnavigation every three-and-a-half years. Buyers uprooted their landbound lives with plans to live out the rest of their days on a luxury floating hotel with a pool deck and spa.

Mechanical problems — including issues with the aging ship's rudder — kept the ship in dry dock, leaving some passengers stuck in Belfast for months. Preparing the ship for launch cost $15 million more than what Villa Vie had expected, Petterson told Business Insider.

Once onboard, some passengers were unhappy with their accommodations. Two passengers sued last year, claiming that the ship's living quarters and amenities weren't as promised. One of them also lamented the noise from a pickleball court installed over his cabin. Villa Vie has disputed the claims and said it honored the terms of its contracts. Both lawsuits are ongoing.

Petterson said the ship's first year-and-a-half at sea was "a ginormous undertaking" beset by financial challenges, but the company had put in place a plan for the operation's cash flow to break even by the second quarter of 2026.

Then, in late February, the United States and Israel launched a war in Iran.

Jumping ship

Fuel prices surged. The Odyssey uses marine gas oil, or MGO.

Villa Vie had typically paid around $600 or $700 per metric ton for the Odyssey's fuel, Petterson said. By March, the price of MGO in Singapore had soared to nearly $2,000 per metric ton, according to data from Ship & Bunker, a trade publication.

Unlike larger cruise lines, Villa Vie didn't have the scale to absorb the higher prices, Petterson said.

"They're able to hedge and take away some of that risk, but we're too small of a company to do that," he said.

In April, Villa Vie wanted residents to help shore up its finances. The company asked residents to loan Villa Vie money, offering them interest rates of 12% to 24%, according to a letter viewed by Business Insider. Villa Vie also changed the ship's itinerary, canceling stops at some ports to stretch its fuel supply, Petterson said.

Some residents got "scared," Petterson said. They sold their cabins to other people who wanted to live aboard. That, in turn, made things more difficult for Villa Vie's sales team, which was still trying to find buyers for the remaining vacancies on the ship, he said.

The Odyssey's passengers were mostly Americans; some of them were content creators. In Substack posts and YouTube videos, they posted about their experiences, some positive and some negative, for the roughly two years that it sailed the world.

Some travel bloggers and social media posters blamed Villa Vie's management for the operation's financial troubles. The negative publicity made it harder to bring more people aboard, Petterson said.

By the start of June, fuel prices were falling and things were looking up for Villa Vie, Petterson said. The Odyssey had sold 85% of its units, he said. Villa Vie announced plans to launch another residential cruise ship that would be bigger and better than the Odyssey.

Then in July, fighting between the US and Iran expanded. Fuel prices jumped, and the company's prospects plunged again, he said.

As fuel prices remained high, Villa Vie entered into talks with Oneil Khosa, the former CEO of Margaritaville's cruise line, to inject cash and join as an operational partner, Petterson said. Last week, the negotiations turned into "a game of chicken that just blew up in everyone's face," he said. Talks fell apart.

Khosa didn't immediately respond to a request for comment.

Villa Vie announced that the Odyssey was suspending operations while it was docked this week at the port of Sihanoukville in Cambodia. The price of MGO in Cambodia is now $2,200 per ton, Petterson said, and in Manila, it is even higher.

Passengers told Business Insider they were given only eight hours to disembark.

Barbara Fiegel, 62, who had lived with her partner aboard the Odyssey since December 2024, returned to the ship with her partner later that evening and the following day to pack their belongings.

"I couldn't stop crying," she said.

Petterson said the company could undergo a court-supervised restructuring that would allow management to remain in control, or it could have to liquidate.

"We just don't have the financial ability to sustain normal operations for the time being," he said. "So we're protecting the asset and laying it up until we can find a solution going forward."

Petterson expressed pride in the "community of almost 400 residents" that sailed around six continents. He said letting them down felt "incredibly deflating."

"I'm working day and night to find a way to get through this," he said.

Joshua Nelken Zitser contributed reporting.

Have you spent time on the Villa Vie Odyssey as a cabin owner, renter, or staff member? If you have a story to share, get in touch with us at jzitser@businessinsider.com.

• Charles Lamanna, head of Copilot, Agents, and Platform, just took over Office and Teams.
• Teams within his new combined unit have adopted flatter structures amid the rise of AI agents.
• He's also enforced a stricter RTO for senior staff, and offered employees relocation to major hubs.

Microsoft's head of the Copilot platform, AI agents, and now Office is making good on his promise to reshape how his teams work.

"The most important thing my team will do this year won't be any single product or feature we ship: instead, it will be changing how we work," Charles Lamanna, the new boss of this key Microsoft unit, wrote in August.

Lamanna has started requiring senior staff to work in offices four days a week, and he's offering relocation to major hubs, according to people familiar with the changes. Teams within his organization have also reorganized to a flatter structure removing middle managers in line with Lamanna's views about how agentic AI is changing engineering.

"We're rethinking where managerial layers are critical and where flatter structures can enable faster decision-making, clearer ownership and greater autonomy," a Microsoft spokesperson said.

The moves offer an early look at how Microsoft is reworking its software empire for the AI age. Lamanna, who already oversees the company's Copilot and AI agent platforms, now controls the Office productivity software and Teams workplace chat service that are used by millions of workers.

Lamanna took over those groups earlier in October when the previous boss, Ryan Roslansky, announced plans to leave at the end of the year. Roslansky was seen as a successor to Microsoft veteran Rajesh Jha, who retired in July. Roslansky and Lamanna were two of the three executives who made up the new Copilot leadership team.

The changes come as CEO Satya Nadella reshapes the company around AI. Microsoft has been consolidating responsibility for its AI products, and a wave of senior executive departures has made way for a new generation of leaders.

"Span of control"

Lamanna's expanding responsibilities make him a key player in this leadership transition, giving him oversight of Microsoft's flagship workplace software and the AI tools that could change how customers use its products.

Recently, the Teams unit now under Lamanna reorganized by increasing the "span of control" for managers in engineering, according to two of the people familiar with the changes.

This refers to the number of employees who report to each manager, and it's become common for tech companies to flatten engineering organizations like this in the AI era, as coding tools and agents write more software.

The reorganization included converting managers to individual contributors, the people said. The idea is that agentic coding capabilities mean Microsoft needs fewer managers, according to one of the people. The team will now have a ratio of one manager per 12 individual contributors.

"Agentic coding capabilities have changed every level of the engineering function," Microsoft's spokesperson said. "Software engineers are no longer hand-assembling every line of code. Instead, they are now designing and directing the 'agentic coding machine' that helps build the product."

As AI makes it easier to build software, skills like making sound technical decisions, designing systems, ensuring quality and security, and understanding customer needs become more valuable.

"At the same time, some tasks that traditionally required managerial coordination, such as managing handoffs and orchestrating work across teams, become less central," the spokesperson said.

Other teams have implemented similar restructuring, the spokesperson confirmed.

RTO and relocation

Lamanna has also started reshaping where employees work. Last week, Lamanna's Copilot, Agents, and Platform (CAP) organization offered select US employees the option to relocate to offices at Microsoft's Redmond, Washington headquarters, San Francisco, or New York, according to three people familiar with the plans.

The people who spoke with Business Insider for this story asked not to be identified discussing internal matters.

Lamanna has also asked employees at the "partner" level and above — some of Microsoft's most senior staff — to start working in physical offices at least four days a week. The companywide standard is three days a week.

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• Microsoft lowered its 2026 capex forecast to $170 billion, down from $175 billion.
• CFO Amy Hood cited delays in third-party capacity as Wall Street scrutinizes returns on AI spending.
• Azure revenue jumped 48%, beating expectations, while Microsoft's headcount fell 2%.

Microsoft reduced its forecast for capital expenditure, a rare move in an industry that mostly continues to splurge more on huge AI investments.

The software giant said capex for the 2026 calendar year will be $170 billion from a previous forecast of $175 billion.

Chief Financial Officer Amy Hood gave the forecast on the company's fiscal first-quarter earnings call on Wednesday.

She said Microsoft was expecting new capacity to arrive from third-parties, but some of these "GPU-as-a-Service contracts" have been delayed until the second half of the fiscal year.

This likely refers to other providers of AI cloud services that use Nvidia GPUs to run their offerings. Microsoft has partnered with some outside providers to meet rampant AI demand.

Hood's comments could refer to a recent spate of AI data center project delays, which have mostly been caused by a lack of electricity, along with local opposition.

The CFO said Microsoft expects capex to accelerate in the second half of its fiscal year, as the delayed capacity kicks in.

Wall Street has become increasingly concerned the huge investments cloud companies are making to expand AI infrastructure. Microsoft last quarter kept its forecast unchanged, notable as many cloud giants have been steadily increasing their AI spending forecasts.

Overall, Microsoft reported $92.3 billion in revenue, up 19%, for the fiscal first-quarter ending Sept. 30. Azure cloud revenue was up 48% to more than $33 billion, surpassing Wall Street expectations.

Microsoft share were up about about 3% in after-hours trading following the earnings call.

Earlier this week, Microsoft offered a buyout to more than a quarter of its workforce. A Microsoft spokesperson told Business Insider on Wednesday that the company expects 5% of eligible employees at most to accept the buyout.

"We expect very few people to select this offer because of the growth opportunities here at Microsoft," Hood wrote in an internal memo viewed by Business Insider. Microsoft's headcount slipped 2% during the fiscal first quarter, the company reported.

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