MGM Resorts Lays Off 18,000 Furloughed Workers

TOPLINE

MGM Resorts announced Friday that it is laying off 18,000 previously furloughed workers as the casino industry struggles to stay afloat during the ongoing coronavirus slowdown. 

KEY FACTS

The cuts will be effective starting Monday, according to a letter sent to employees by CEO Bill Hornbuckle.

According to the letter, MGM will seek to recall workers as demand returns.

Employees who are laid off will have their health benefits extended through September 30 and those recalled by December 31, 2021 will be able to maintain their seniority, the company said.

The separation notices were sent because federal law requires that workers who have been furloughed for more than six months receive an official separation date.

At the start of the year, MGM Resorts employed about 70,000 people—the layoffs account for 25% of that total. 

Shares of the company gained 5% on Friday morning despite the grim news. 

Crucial quote

“While the immediate future remains uncertain, I truly believe that the challenges we face today are not permanent,” MGM Resorts CEO Bill Hornbuckle wrote in the Friday letter to employees. “The fundamentals of our industry, our company and our communities will not change. Concerts, sports and awe-inspiring entertainment remain on our horizon.”

Big number

1 million. That’s how many people filed new claims for unemployment benefits last week, according to data released Thursday by the Labor Department. While the pace of new layoffs has slowed substantially since March, when a record 6.9 million people filed claims in a single week, the unemployment rate remains astronomically high. New claims have held steady at about 1 million each week for the last several weeks, indicating that the pace of recovery is also slowing.

Key background

MGM Resorts isn’t the only company to let go of employees on such a massive scale because of the pandemic. This week, American Airlines said it would be forced to cut 19,000 jobs in October if it doesn’t receive additional federal aid. In July, American oil company Schlumberger said it would cut 21,000 jobs.  

Further reading

In Photos: Customers Crowd Into Casinos After Las Vegas Reopens (Forbes)

Casino Operator Wynn Resorts Is Losing Up To $2.6 Million Per Day From Coronavirus Shutdown (Forbes)

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