New Zealand-based casino operator Skycity Entertainment Group has announced that it will lay-off 200 staff and cease a majority of capital expenditure projects indefinitely in order to reduce costs.
The measures come in response to government directives that have seen the closure of Skycity’s five casinos in New Zealand and Australia, with the company revealing it anticipates a loss of around NZ$90 million (US$53 million) in revenues per month until closure orders are lifted.
With labor costs of around NZ$20 million per month, the company announced in a Friday morning filing that it had begun the process of laying off around 200 of its 5,000-strong workforce, with another 700 staff able to be retained only because of a wage subsidy scheme being offered by the New Zealand government. Waged staff have been asked to accept a pay cut to 80% of their pre-virus wages with those not wishing to accept the offer provided the option of voluntary redundancy.
Skycity also announced that executive salaries will be cut by between 20% and 40% with CEO Graeme Stephens, CFO Rob Hamilton and COO Michael Ahearne all taking 40% cuts. The board has volunteered to cut its fees by 50% in 2020.
“This is a storm we could, and would, weather if we were to re-open within a few months in a pre COVID-19 world,” said Stephens.
“Unfortunately, the impact of COVID-19 is not limited to the short-term consequences of closure. Even when we fully open, we reasonably expect that weaker economies, lower personal disposable income and changed entertainment habits, as well as longer term travel restrictions, will result in us recommencing as a smaller, domestically focused business.
“Given that our business has fundamentally changed for the foreseeable future, we need to take action now to address this.”
Skycity will continue with redevelopment of Adelaide Casino due to construction being considered an essential service in Australia.
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