New Zealand casino operator SkyCity Entertainment Group warns that it is likely to sack an additional 700 workers as it prepares to open as “a smaller, domestically focused business” once the pandemic sounds all-clear.
On Monday, due to the COVID-19 pandemic, SkyCity released an update on its attempts to minimise the fallout from suspending its casino operations in both Australia and New Zealand. Among the “incredibly difficult” choices it faces is the reduction by “about 700” of its rostered (waged) workers to ensure it is prepared for the “new environment” that awaits post-lockdown.
SkyCity revealed a month ago that it was laying off around 200 workers, following the standing down of “around 90 percent” of the workforce at its Adelaide lone Australian casino. The organisation asked the majority of its waged workers to agree to work for 80 percent of their usual salary, a measure SkyCity believed would help prevent more 700 redundancies.
Most of the 700 layoffs are planned at the Auckland casino group, which currently employs nearly 3,000 employees. SkyCity CEO Graeme Stephens said it would take “some weeks” for the layoff process and the company will work with the affected workers to make the process as painless as these things can be.
It was confirmed today that SkyCity will restart its operations in New Zealand on Thursday, but expects to operate as a shadow of its former self, thanks to a perfect storm of “weaker economies, lower disposable personal income, changed entertainment habits, restrictions on mass gatherings and physical distancing requirements as well as long-term travel restrictions.”
SkyCity is reportedly planning to suspend its dividend programme and possibly raise some new capital to ensure that it has the ready for the downturn, which is expected to have a significant impact on the VIP gambling business of the company.
SkyCity recently convinced the Government of New Zealand to declare the pandemic a force majeure case, enabling the company to extend the deadline for completion of its New Zealand International Convention Center project in Auckland until January 2025. The project had already faced delays resulting from last October’s fire and COVID-19 had prevented construction from proceeding at the necessary rate.
In other promising news, a recent government study suggested that SkyCity’s online casino licenced to Malta had received a substantial boost from the abolition of land-based gaming options by COVID-19. The registered customer based site topped 15k users by the end of April, up from just 3,500 reported by SkyCity when it released its annual results for 2019 in February.