By Tyler Durden
While stocks soar to record highs by the day, no prosperity is “trickling down” to the leisure and hospitality industry – the sector most hit by the covid shutdowns – and things just went from bad to worse for the US gambling mecca where as CNBC and the WSJ reported, MGM Resorts International intends to send separation letters to 18,000 previously furloughed employees throughout the US. The job cuts start next week, and represent about a quarter of all the company’s pre-pandemic US workforce of 68,000.
“Nothing pains me more than delivering news like this,” MGM’s CEO Bill Hornbuckle wrote in a tear-stained note to accompany the thousands of pinks lips. “The heart of this company is our employees and the world-class service you provide. Please know that your leadership team is working around the clock to find ways to grow our business and welcome back more of our colleagues,” Hornbuckle said.
“While the immediate future remains uncertain, I truly believe that the challenges we face today are not permanent.” Hornbuckle added “The fundamentals of our industry, our company and our communities will not change. Concerts, sports and awe-inspiring entertainment remain on our horizon.”
The company promised to extend health benefits for furloughed employees until September 30.
The “good news” is that MGM said it still plans to rehire those workers as business demand returns, and will maintain a recall list of former employees, and workers who return before the end of 2021 will retain seniority and immediately resume benefits, the company said. Health benefits for cut workers are being extended through Sept. 30.
“Federal law requires workers to be given a separation date if they’re furloughed for longer than six months. Aug. 31 marks six months of administrative separation for the furloughed MGM employees,” said CNBC.
MGM’s Empire City in New York state and Park MGM in Las Vegas remain closed, as casinos in Las Vegas are all operating at limited capacity with large declines in tourism and travel to the Las Vegas Strip. In June, Nevada casinos were allowed to reopen at half occupancy and MGM Resorts phased in casino reopenings over the following weeks. Two of MGM’s 13 Strip resorts, Park MGM and the NoMad, are still closed, and MGM’s Mirage casino reopened this week. MGM Resorts reported a 91% drop in revenue for the three-month period that ended June 30, a similar decrease to other operators on the Strip.
Provide, Protect and Profit from what’s coming! Get a free issue of Counter Markets today.