According to a report by CNBC, the casino industry is experiencing mass layoffs on a global scale. The reason is the Covid-19 crisis, which has severely damaged the leisure and catering industry in particular. The USA is hit particularly hard, but thousands of jobs are also in danger in Europe and Asia. Unions are fighting the disaster. What developments can be expected?
A million job losses in the leisure sector
In the last few months, the economic and financial data broadcaster CNBC has focused more and more on those industries that have been hardest hit by the effects of the corona crisis worldwide. With a spate of layoffs in the leisure and hospitality sectors, the US economy has seen the highest number of job losses in its history. Around 7.7 million jobs were lost in this industry, 47 percent of all jobs.
Most jobs, around 5.5 million, were lost in the catering industry. But there was also an immense number of job losses in the casino industry. According to CNBC, over a million jobs in casinos and theme parks have already been cut across the US. In Las Vegas meanwhile, almost all well-known casino operators fear that they will have to lay off. The reason is the million dollar losses due to the 78-day casino shutdown.
3,128 jobs at Cosmopolitan at risk
Two weeks ago, the Cosmopolitan announced that layoffs and leave of absence could hit around 3,128 workers in August. The company’s vice president Adrianna Kasunic stressed that the duration and severity of the pandemic, as well as its impact on the resort and the entire industry, are impossible to predict. The announcement was made, although Las Vegas was already on June 4th. began to reopen.
Another major Nevada operator currently initiating layoffs is Boyd Gaming. At least 2,500 jobs are set to be cut as Las Vegas visitor numbers are still well below pre-pandemic levels. The main reason for the absence are the travel restrictions. In addition, the fear of infection is still great, Nevada is a corona hotspot in the USA.
According to statements from local media, the number of layoffs could be even higher. The Las Vegas Review Journal speaks of 25 to 60 percent of the workforce. Boyd Gaming meanwhile has around 10,000 employees in twelve companies.
Layoffs in Circus Circus and Tropicana
The Circus Circus Hotel & Casino and Tropicana Las Vegas are also planning layoffs. We are talking about 872 employees. The local employment office reported 252 and 620 layoffs, respectively, which are expected to take place by October. The advance warning is based on the so-called Worker Adjustment and Retraining Notification Act, which all operators who have more than 100 employees must adhere to.
The move has been foreseeable for a long time. Shortly after the pandemic warning from the World Health Organization (WHO) and the declaration of a national emergency, Circus Circus began on March 17 with compulsory leave, permanent layoffs and reduced working hours for a total of 2,074 employees. Personnel director Laura E. Moreno signed a letter to the mayor to draw attention to the impending layoffs.
Tropicana Las Vegas, operated by Penn National Gaming, forwarded the announcement on July 3rd. The circumstances are currently dramatic and are out of control, the management said. In order to contain the effects of Covid-19, Penn had already announced at the end of March that it would sell the Tropicana. This is assigned to GLPI (Gaming & Leisure Properties) as part of a lease back agreement.
The layoffs are to come despite large unions like Culinary Union, which represents over 650,000 workers in Nevada, have been demanding continued wages and job guarantees since April. In the transition period between March and April alone, a record 92,000 people applied for unemployment benefits in the silver state of Nevada. The gambling association AGA (American Gaming Association) had also applied for a rescue package worth millions from the government.
5,200 job losses in Macau
Casino employees are also faced with mass layoffs in the Asian gambling delta of Macau, which suffered a 93 percent drop in sales at the beginning of June. The Asian industry magazine IAG currently estimates the number of job losses at around 5,200. In the meantime, the losses of the arcades are even around 97 percent. Large operators like Melco, Wynn or Las Vegas Sands have virtually no income at all.
Further layoffs can therefore be expected. Although Macau’s casinos have reopened, most of the visitors stay away. The main reason is travel restrictions in China, makes up around 90 percent of visitors. Most recently, Prime Minister Ho Iat Seng criticized the Chinese special administrative region’s high level of casino dependency. More than 60 percent of the GDP here comes from the gaming sector.
Job cuts in Europe too
Mass layoffs due to the pandemic are not only occurring in the USA and Asia, the devastating consequences are also emerging in Europe. For example in Great Britain. Although at least the English arcades have been able to reopen since August, the market giant Genting UK, which operates 43 casinos in the UK, announced two weeks ago that it would lay off 1,642 employees. In advance, there was even talk of a complete market withdrawal.
It is still unclear whether Genting will refrain from his plan in view of the reopening of the English casinos. The future of the Scottish and Welsh employees is also still uncertain. Over 2,000 employees are currently worried about their future careers. They are currently on vacation and unable to work. Industry associations therefore called for immediate action by governments.
Casinos Austria is planning another large-scale job cuts. The state-owned Austrian gaming company was hit so hard by the Corona crisis that job cuts of 27 percent are on the cards. Up to 427 full-time positions are affected. To this end, wage cuts between 15 and 20 percent are planned. This means that personnel costs can be reduced by around 11 percent, the Supervisory Board announced.