Australian gaming machine innovator Aristocrat Leisure Limited has reportedly blamed ‘softer demand’ due to the ongoing coronavirus pandemic for its decision to furlough approximately one-quarter of its global workforce until the end of June.
According to a report from GGRAsia, the Sydney-listed innovator used an official filing to detail that it will be laying off around 1,000 full-time workers and cutting a further 200 roles permanently in hopes of saving about $64.3 million between now and the end of its financial year in September.
Aristocrat Leisure Limited reportedly declared that the moves, which will also encompass the repositioning of some 200 workers from full to part-time roles, are to be implemented after ‘almost all’ of its land-based business partners suspended operations from mid-March in response to the coronavirus outbreak. It purportedly explained that it is to moreover temporarily reduce by up to 20% the base salaries of its board and roughly 1,500 other employees and cut remuneration for its Managing Director, Trevor Croker (pictured), by 30%.
Reportedly read the filing from Aristocrat…
“Around 1,000 staff will be stood down until the end of June, principally in land-based sales, service and manufacturing operations, reflecting venue closures and uncertain re-opening time frames. Around 200 roles will be removed permanently from the business, reflecting changed priorities. These changes, and other prudent steps we are taking as part of our coronavirus response, will deliver important operational and financial flexibility, focus and efficiency through this period of uncertainty.”
The Sydney-headquartered firm reportedly furthermore stated that these ‘significant workforce changes’ are due to go into effect from Friday but that it had already cut all ‘discretionary, consultant and contractor spend in line with revised priorities’ so as to help ‘mitigate the impacts’ of the coronavirus-related slowdown.
As to when it believes the global land-based casino market will eventually start to improve and Aristocrat Leisure Limited reportedly pronounced that any timetable would be ‘highly uncertain’ but that it envisions ‘venue re-openings will take place on a phased basis’ as consumer confidence improves and governments begin to ease ‘social distancing and travel limitations.’
Aristocrat’s filing reportedly read…
“Aristocrat Leisure Limited continues to implement a comprehensive coronavirus response, focused on protecting its strategic advantages and positioning the land-based business to respond quickly as demand returns. The group is supporting all affected employees including with appropriate transition assistance and separation benefits, access to paid leave and preserving health coverage for United States staff in the case of stand-downs, counselling and assistance accessing government support where available.”
GGRAsia reported that the Australian innovator additionally used the filing to proclaim that its digital business is continuing to ‘perform strongly with higher bookings and player engagement evident across most of the portfolio’ and will likely account for approximately 40% of its aggregate annual revenues. It purportedly furthermore asserted that its balance sheet remains ‘strong’ due to over $645.36 million in ‘available liquidity’ comprised of cash from operations and approximately $184.58 million from a pair of revolving credit facilities.
The filing additionally read…
“The group is well positioned to preserve its strong balance sheet metrics during this period including through the scaling back of capital expenditure. In addition, to further assist liquidity and position the group for post-coronavirus recovery, directors have decided to suspend its progressive dividend policy and do not intend to declare an interim dividend as part of the group’s half-year results scheduled to be released on May 21.”