MGM Mirage on Tuesday said the layoffs it announced this week to quell concerns it was severely depressed by the economic downturn had little to do with the decline in business.
“The vast majority of the roughly 400 managerial positions that have been cut across the globe would have happened even if the economy was booming,” said Jim Mullen, president and chief operating officer of MGM Mirage. However, it is true that the recession has led to an increase in the number of layoffs, Mullen said.
“I don’t want to minimize the fact that the economy has affected MGM,” he said. “We want to have the same economy as we did in 2007 and 2005.” 온라인카지노
The company’s swift action to clarify the layoff announcement represents the level of concern among investors, the casino industry and workers in Las Vegas during the downturn. Although the decline has been relatively small so far, business has been suspended.
MGM Mirage is the largest casino company in Nevada. Merren said the company’s cost-cutting plan started shortly after it was promoted to chief operating officer. This prompted a top-down overhaul of the company, which previously operated as two separate companies, MGM Grand Resort and Mirage Resort.
MGM Mirage was formed in 2000 when MGM Grand acquired Steve Wynn’s Mirage Resorts. In 2005, MGM Mirage engulfed the Mandalay Resort Group by splitting it between its two divisions.
“We found a lot of relief from the Mirage and Mandalay acquisitions,” Merren said. “We extracted a lot of value from these deals … but there was a significant amount of added benefit that we couldn’t achieve under the old company structure.”
In addition to layoffs, the company has streamlined its interactions with suppliers and revamped several departments, including technology, purchases, design and construction, which is like “a major company in itself,” Merren said. “This is a very long chapter in the process that will happen as long as I’m here.”
The layoffs, identified after months of analysis, affect about 50 corporate-level managers, with the rest working at individual properties. Of MGM Mirage’s approximately 67,000 employees, about 5,000 are at the administrator level. Murren said the company hopes to generate more than $200 million in cost savings and additional revenue each year through the plan.
But some Las Vegas veterans say the toll from layoffs is not worth the benefits. In an interview on Tuesday, Steve Wynn said he has no plans to lay off workers and has never fired them, preferring more gradual measures such as cutting wages through attrition, reducing working hours and recruiting volunteers for days off when business is sluggish.
“I think it’s a bad idea because people who aren’t getting fired think, ‘Who’s next?’ It scares the workforce,” Wynn said. Wynn’s luxury properties tend to be slow in business, as even the wealthiest customers are more cautious about their money. But Wynn said the company has cut 300 jobs through exhausting work, so it doesn’t need layoffs.
At Harrah’s Entertainment, about 100 workers lost their jobs when Bally recently shut down its buffet because of its slow business. Harrah laid off as many as 500 corporate-level managers as part of its own efficiency efforts, which spanned months by mid-2007. The job cuts, like MGM Mirage’s employees, were controversial.
Hara’s employees thought the layoffs stemmed from the company’s desire to be more attractive to investors, but executives vehemently denied any connection to the private equity firms’ upcoming acquisitions. Executives said the job cuts were aimed at reducing bloated staffing and had been in the works even before takeover talks began. MGM Mirage says businesses have been gradually improving in size since January. Harrah also suggests businesses appear to be improving rather than decreasing.
Dominant local casino operators Station Casino and Boyd Gaming have laid off workers because of the recession. Neither company has tallied figures, although analysts say the expected layoffs were due to the mortgage crisis disproportionately hurting Las Vegas’ economy. It is not clear how the economy is affecting ordinary workers on the strip.
The Culinary Society, which represents more than 50,000 workers at Streep, said layoffs and time cuts through January and February are typical for most of the year. The impact of the slowdown on workers will be clearer in the coming weeks, said Pillar Weiss, the Culinary Society’s political director. This is because workers who were laid off during the slower months generally expect to be rehired now that the economy picks up again.