The Wall Street Journal reports that the layoffs represent 25 percent of the company’s pre-COVID workforce of 68,000, as the global travel slowdown continues to hurt the casino industry’s recovery from COVID-19.
In a letter to workers, Hornbuckle said federal law requires the firm to mail termination notices to its furloughed workforce after six months. But MGM said it still plans to bring those workers back on-staff as business demand ramps back up.
“While the immediate future remains uncertain, I truly believe that the challenges we face today are not permanent,” Hornbuckle wrote. “The fundamentals of our industry, our company and our communities will not change. Concerts, sports and awe-inspiring entertainment remain on our horizon.”
MGM said it will keep a “recall list” of the laid-off staff members. If the economy improves within the next 15 months and they are invited back to work, those workers will retain their seniority status and resume health benefits. The company said the laid-off workers' healthcare benefits will be maintained through the end of September.
While the U.S. Labor Department reported that the nation’s economy added 1.8 million jobs in July, which was better than analysts’ expectations, and the unemployment rate fell to 10.2 percent, more than 30 million Americans are collecting jobless benefits.
Last month, MGM reported disappointing second-quarter results, as consolidated net revenues fell to $290 million, a 91 percent decline compared to the same quarter last year.
The company said the losses were driven by the temporary closure of casino operations in the U.S., limits on the number of table games and available seats, the number of slot machines available at its casinos, and other social distancing restrictions.
Consolidated operating loss was $1 billion in Q2 compared to income of $371 million in the prior-year quarter. Net losses attributable to MGM Resorts totaled $857 million in Q2, while net income attributable to MGM Resorts in Q2 of 2019 was $43 million.