MGM Is Forced To Lay Off 18,000 Employees To Overcome The Covid-19

Article by : Helen Sep 4, 2020

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US land-based casinos continue to experience incredible pressure from declining revenue and visitor traffic. The fall in financial indicators and the closure of the least profitable gambling halls lead to a gradual reduction in staff. More recently, it became known that MGM Resorts plans to lay off about 18,000 employees to minimize operating costs and return to pre-crisis financial performance.

Last week, MGM CEO Bill Hornbuckle approved an internal communiqué. He said that Covid-19 continues to affect the entire gambling industry negatively. Therefore, the brand will have to take unpopular steps to return to pre-crisis indicators and survive this difficult period. According to preliminary estimates, it concerns the reduction of at least 18,000 employees. More accurate data will be announced on Monday, August 31. Of course, the layoffs will affect employees who have not returned to work after a 6-month vacation. Such steps were very positively accepted by investors and representatives of the financial market. As a result, the company’s shares soared 5% after the markets closed on Thursday.

the operator will continue to pay medical benefits to staff affected by Covid-19 through the end of September.

Employees who have been on forced leave for a long time will maintain their work experience. It is not yet known how to formalize workplace recall notices from a legal perspective to reach a consensus with laid-off employees. Of course, from the first days, the company took an active part in supporting its employees on forced leave. Especially for these purposes, the brand created the MGM Resorts Foundation. In total, the company’s staff received more than $11 million in financial assistance, which allowed them to overcome the pandemic’s consequences more confidently.

The company informed employees last month that they will receive vacation recall notifications from time to time. After opening some of its facilities, the brand was gradually looking for a middle ground between the number of visitors and the required staff to serve them. MGM was in no hurry to open the doors of all casinos. This was not always related to the feasibility of restarting the business. For example, Empire City in New York and Park MGM in Las Vegas are still on standby.

MGM CEO already announced in July that MGM Park is unlikely to be relaunched until the end of this year unless the high demand for land-based casino services in Las Vegas does not resume. Following the highly anticipated Mirage opening on Thursday, it was announced that Park MGM could also open its doors on October 1. However, this will only be possible if Mirage can achieve the desired financial results in September.

BetMGM, a joint project of MGM and GVC Holdings, has signed a long-awaited agreement with Evolution Gaming. Now all American services associated with BetMGM will provide online casino services in the United States. New Jersey will be the first city to provide live dealer services. Pennsylvania and Michigan are next in line. MGM Resorts is far from the only company forced to lay off employees on a massive scale. American Airlines also notified officials this week that it had to cut 19,000 jobs during October. However, this decision can be reversed if the company succeeds in obtaining additional Federal assistance.

No less large-scale layoffs are also expected by the largest American oil company Schlumberger. In July, their management announced colossal layoffs of more than 21,000 employees due to the Covid-19 pandemic’s consequences.