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Best of Liz Benston

Gaming Guru

Liz Benston

Reports put numbers on reduction of workforce

11 May 2009

LAS VEGAS, Nevada -- Many Las Vegas gaming companies have laid off workers or reduced hours to trim their operating budgets.

Typically, companies try to avoid layoffs by not replacing workers who leave on their own, requesting that employees voluntarily take time off without pay or go home early when business is slow.

Although companies have been reluctant to quantify such changes, in part because of the difficulty in pinpointing fluid staffing levels, recently issued annual reports shed some light on what has happened to the gaming workforce during this downturn.

Of the gaming giants, MGM Mirage experienced the largest decline in staffing, from 54,700 full-time workers at the end of 2007 to 46,000 at the end of 2008. By comparison, the company's part-time workforce rose, from 12,700 in 2007 to 15,000 last year. Employees covered by collective bargaining agreements fell to 30,000 from 31,300 a year earlier. That will swell by at least 10,000 at year's end, when most of the CityCenter resort complex opens.

Harrah's Entertainment also experienced a large decline. The company's worldwide workforce fell to 80,000 at the end of 2008 from 87,000 the year before. The number of union workers also fell, from 28,000 to 26,000.

Declines on the Strip have had a ripple effect on the local economy.

Station Casinos had 13,400 Nevada employees as of Jan. 31, 2008, versus 14,500 employees a year earlier. Competitor Boyd Gaming reported a lesser drop in its workforce, with 16,000 employees at year's end versus 16,900 in 2007.

The Planet Hollywood hotel had 117 fewer employees, at 2,536, and the Riviera reported 111 fewer workers at the end of 2008, or 1,137.

Wynn Las Vegas and Las Vegas Sands, which generate most of their earnings in China and have recently opened resorts, are still growing. Sands has laid off workers in Las Vegas, but Wynn has appeared to avoid that by hiring workers at Encore who might otherwise have been shed at Wynn Las Vegas, next door.

Las Vegas Sands reported 28,500 employees in 2008 versus 28,000 a year ago.

Wynn Las Vegas reported 20,600 last year, including 7,200 in Macau — a figure that includes the December opening of Encore. A year earlier, that figure was 16,500, including 7,000 in Macau.

Many hourly casino employees in Las Vegas go to work concerned whether they will have a decent paycheck at the end of the week — or any at all.

Yet management is in a riskier spot these days given that employers have slashed hourly staffing levels to meet depressed demand.

With cheap hotel rates boosting visitation, or at least keeping resorts busy, the rank and file are still needed to serve customers. Meanwhile, companies continue to seek long-term expense reductions, the kind that can more safely be achieved by cutting managers who don't deal directly with customers. After all, many hourly employees say they are working harder to keep up with business volume that has overwhelmed a now-smaller workforce.

MGM Mirage has cut hundreds of millions of dollars from its operating budget in recent months and expects many of those cuts, in departments such as payroll and information technology, to be permanent. The company eliminated more than 400 middle management jobs last year without hurting business, and is believed to have more upper management employees, including individual resort company presidents, compared with competitors such as Harrah's.

Until their earnings improve, companies will be forced to make increasingly difficult decisions about labor costs — choices that could have big implications for the Las Vegas economy if more full-time career employees join the growing army of part-timers.

For now, reducing pay for the many may be more preferable than layoffs for the few — even among people whose jobs are not cut.

Reports put numbers on reduction of workforce is republished from