MGM Massively Reduces Staff in Casinos and Hotels
Sources aware of the company's actions note that Randy Morton (Bellagio), Cindy Kaiser Murphy (New York-New York), Cliff Atkinson (Luxor), and Eric Fitzgerald (Excalibur) have left their post. It is also known that the total number of management positions has been cut across the company.
Brian Ahern, the spokesperson for MGM, confirms that "the leadership has changed," but has decided not to release any further statements on this issue.
The current CEO, Bill Hornbuckle, has said that Bellagio and New York-New York are casino hotels that the company will open first after the COVID-19 quarantine ends. Exactly when they will open is still unknown.
This is not the first staff reduction MGM has gone through since American casinos closed down. The company has made redundant (or sent on vacation) about 63,000 employees over the past few weeks in an attempt to maintain the company's liquidity.
According to MGM experts, about $200 million in cash is lost monthly while they are closed. The new leadership model presented by Ahern shows that each of the remaining MGM executives will control two or three establishments in the Las Vegas Strip.
Josh Swissman, the founding partner of The Strategy Organization (the company provides consulting services for companies that are in the gambling or hospitality sector in Las Vegas), said that MGM should further reduce the number of leaders in the regions. Swissman believes that such a decision is already being considered, citing a quote from MGM’s press service, which states that "additional statements are expected."
"In the short term, this [ dismissal of several executives] makes sense, firstly, due to the phased plan for opening establishments, and secondly, because of ... lower demand than many expect," said the founder of the consulting company.
"Job cuts will save money," Swissman added, "and these funds will help the company operate more efficiently in the long run."
"It will be interesting to see how business activity improves," says Josh Swissman, "and it will be very challenging to handle everything, given the changes in the leadership."
On the same day, Station Casinos (a real estate gaming operator in Las Vegas) announced that it was planning to reduce the number of employees by a "significant" amount at all levels.
All this continues to demonstrate the pressure that the gaming and hospitality industry is experiencing during this unprecedented and uncertain economic situation, where there are no statistics which one can use for planning and decision-making," said Brendan Bassman, one of the partners of Global Market Advisors (a consulting company for gaming firms).
Nevada’s casinos were closed on the 18th of March. Governor Steve Saysolak extended quarantine measures for secondary businesses throughout the state until the 18th of May. He plans to begin opening the state then.
At the same time, the Governor of Nevada noted that "casinos are not included in the list of enterprises that will resume work immediately."
"The longer it lasts," Brendan Bassman says, "the harder it will be for all of these companies to survive in the long run." "It seems to me that now every casino simply waits and attempts to reduce daily expenses ... They are forced to constantly make decisions, knowing that the economic climate changes day by day."
Based on materials from the Las Vegas Review-Journal.