Warn Notice for Furloughed MGM Employees, Layoffs Inevitable

MGM Resorts reportedly sent a notice to its furloughed employees Tuesday, warning them that some of them may not be re-employed within the next 6 months, and some will be laid off. The gaming and hospitality operator encouraged its workers to search for an alternative job as the uncertainty prevailing at the moment cannot allow for reliable future predictions as to when and how business will return to pre-crisis levels.

Business Sustainability Is Priority

Las Vegas-based MGM has significant exposure to its home market and the casino closures enforced by St. Gov. Sisolak have materially affected the bottom line of the company, forcing it into some drastic and unpopular measures to cut on costs, including recently laying off the presidents of 4 Las Vegas properties, Randy Morton of the Bellagio, Cindy Kiser Murphey of New York-New York, Cliff Atkinson of Luxor and Eric Fitzgerald of Excalibur.

Initially, MGM placed nearly 63,000 employees on furlough, looking to reduce the cash burn rate during times of nearly zero revenues, and yesterday the casino operator took the next step towards a potential mass layoff of team members.

“When we first furloughed our employees, we hoped the spread of the virus could be contained or that an effective treatment would emerge quickly. Based on the current situation, we now believe that some of our colleagues may not return to work this year.”

Bill Hornbuckle, Acting CEO, MGM Resorts International

60-Day Notice Period

The company notice sent to employees Tuesday telling them that they will remain on furlough until August 31, before layoffs commence, complies with the Worker Adjustment and Retraining Notification Act. According to the U.S. Department of Labour, MGM needs a 60-day notice to be able to downsize more than 50 team members from a single site, without being liable to pay each affected employee.

As MGM Acting CEO explains, the company expects to see continued revenue drop, defined by reduced demand for hotels, restaurants and events, as well as significant convention postponements and cancellations, due to demand for travel being expected to continuously decrease into early 2021.

MGM Resorts will gladly welcome furloughed employees back once the industry recovers, but many of its team members may seek permanent employment elsewhere by then and the company encourages them to do what is best for them.

MGM Hugely Dependent on Las Vegas

MGM is recently one of the actively present in the news casino operator, seeking ways to restart the hospitality industry in Las Vegas. The company announced that re-opening of its business in the state will begin cautiously, by one high-end and one low-price band property, the Bellagio and New York-New York, respectively.

The casino operator even pitched the NBA, offering its Strip properties to help the league finish its suspended season, hoping to bring life back to Las Vegas.