American casino operator, MGM Resorts International, has reportedly followed through with a portion of a cost-saving initiatives first unveiled in January by announcing the immediate elimination of some 254 senior managerial positions.
According to a Thursday report from the Las Vegas Review-Journal newspaper, the move comes as the casino firm is under investor pressure to improve earnings so as to boost share price and forms part of a wider campaign that it hopes will see its overall labor costs reduced by as much as $100 million.
The newspaper reported that MGM Resorts International has experienced a twelve percent decrease in the value of its shares since August. This has been exacerbated by under-par results from its Las Vegas Strip properties although its most recent fourth-quarter consolidated net revenues actually increased by around 18% year-on-year to stand at $3.1 billion.
The Las Vegas Review-Journal reported that yesterday’s announcement pushed the individual value of shares in MGM Resorts down by a further 0.2% to stand at $27.75 with the Las Vegas-headquartered company declaring that any impacted employees are to be offered career transition services.
MGM is responsible for over 25 integrated casino resorts spread across the United States such as the giant MGM Grand venue in Las Vegas while its MGM China Holdings Limited subordinate runs the MGM Macau and MGM Cotai properties in the gambling hotspot of Macau. The newspaper estimated that the just-announced redundancies, which involve only non-union employees, will see the Nevada firm save around $13 million a year and come after it had already accepted the voluntary resignations of several top executives including its former Chief Financial Officer, Dan D’Arrigo.
Further redundancies coming:
MGM Resorts International is hoping that its wider cost-cutting initiative will lead to a $200 million boost in operating cash flow to as high as $3.9 billion by next year. The casino firm’s Chief Executive Officer, James Murren (pictured), explained that he intends to announce a further raft of job cuts over the next few weeks but declined to specify any further details.
Murren statement reportedly read…
“I know this day is going to be difficult for everyone. I also know that changes like this can be stressful and I regret the impacts on the individuals whose roles are being eliminated. We would not be taking these steps if we did not believe they were necessary to serve the long-term interests of the company.”