MGM Resorts to Lay Off 18,000 Amid Slow Comeback for Casinos
(Bloomberg) — MGM Resorts International is sending pink slips to about 18,000 employees, more than one-quarter of its pre-pandemic U.S. workforce, due to the slow recovery of some casino markets.
The cuts, while centered in Las Vegas, are happening nationwide, the company said on Friday. MGM, the largest operator of casinos on the Las Vegas Strip, has been struggling to fill its rooms and casinos since Nevada began reopening in early June. Two of the company’s casinos, the Park MGM in Las Vegas and Empire City in New York, remain closed.
“While we have safely resumed operations at many of our properties and have returned tens of thousands of our colleagues to work, our industry — and country — continues to be impacted by the pandemic, and we have not returned to full operating capacity,” Chief Executive Officer Bill Hornbuckle said in a memo to staff.
The company will continue to pay health-care benefits through the end of September and anyone recalled to work by December 2021 will maintain their seniority, he said. MGM employed about 70,000 full- and part-time workers at the end of last year.
Shares of MGM shares were already up on Friday, but they reached a session high after the cost-cutting announcement. The stock climbed as much as 6.4% to $24.27 in New York. They were down 31% this year through Thursday’s close.
Visitors to Las Vegas tumbled 61% to 1.44 million in July, the first full month Nevada casinos were reopened.
There also were no convention guests, according to the Las Vegas Convention and Visitors Authority. Hotel occupancy was just 43%, less than half what it was a year ago.
Rooms at properties such as MGM Resorts’ MGM Grand and Caesars Entertainment Inc.’s Paris are available for under $50 a night.
The Las Vegas numbers underscore the difficulties faced by economies dependent on air travel, with consumers still reluctant to venture far beyond their homes for entertainment.
Casinos whose guests typically arrive by car are seeing strong business because there are so few other entertainment options open. Gaming revenue in Ohio and Mississippi rose in July from a year earlier, buoying the shares of regional casino operators such as Penn National Gaming Inc., which has seen its stock fly to nearly $55 from under $5 in mid-March.
(Adds shares, updates with hotel room pricing in fourth paragraph from bottom)
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