SkyCity is making 200 staff redundant as part of cost cutting because of the Covid-19 virus.
The casino operator said it had no choice but to cut the size of the workforce given that once business resumes it will be at much reduced level.
Chief executive Graeme Stephens said it’s losing $90 million a month in revenue during the lockdown, while its labour costs alone are $20m.
The company has about 4000 staff, many of whom are lower paid wage workers in its casinos, hotels, and restaurants.
They are being asked to accept 80 percent of their base pay, with the government’s wage subsidy supporting their jobs.
Stephens said without the subsidy scheme there would have been closer to 700 redundancies.
“For our salaried employees in New Zealand, the subsidy is less meaningful and, consequently, we will need to reduce our headcount to a level more commensurate with
our anticipated levels of trade once we reopen,” he said.
Stephens said the redundancies would cost the company about $11m and assistance was being given to find jobs in sectors needing staff such as food and healthcare.
Senior executives are taking between 20 and 40 percent pay cuts, and directors have agreed to halve their fees.
The measures would cut SkyCity’s labour bill by about $50m a year.
Stephens said virtually all capital spending has been put on hold, but it was making savings because all work on the International Convention Centre and hotel had stopped.
“We are doing what it takes to ensure that our business survives for the long term.”
“We all believe that the virus will ultimately pass and that we can then start to return to ‘normality’. None of us, however, know what ‘normal’ will look like, or when it will happen – but it is reasonable to assume that it will take some time.”
Stephens said it was possible its lucrative high roller business would recover reasonably quickly once travel restrictions were lifted, but its hotels and other operations relying on tourism and corporate travel would take longer to recover.
This article was originally published on RNZ and re-published with permission.