Casino operator SkyCity has revealed “incredibly difficult” plans to cut another 700 jobs.
The company is blaming “weaker economies, lower personal disposable income, changed entertainment habits, restrictions on mass gatherings and physical distancing requirements” – and long-term travel restrictions for the decision.
SkyCity Entertainment Group chief executive officer Graeme Stephens said the company had already restructured its management team and its salaried employee base.
“Unfortunately SkyCity now expects to reduce its workforce further,”he said today( May 11).
“We will commence consultation on a proposal to reduce the number of rostered (waged) staff by around 700 to ensure our business is prepared to operate in the new environment.”
Stephens said the decision was “incredibly difficult for all involved”.
In early April, the company announced about 200 job cuts to reduce costs, saying the Covid-19 crisis had caused “an unprecedented impact on people, businesses and the global economy”.
“We will need to reduce our headcount to a level more commensurate with our anticipated levels of trade once we reopen. This will lead to redundancies for approximately 200 of our people and we will be starting this process with immediate effect,” the business said in early April.
SkyCity had suffered a $1 billion hit to its NZX market capitalisation from Covid-19 and might soon suspend dividends and raise new capital, an analyst says.
Chelsea Leadbetter, of Forsyth Barr equity research, said that although the business was strong, the pandemic had dealt it a major financial blow and shareholders could soon feel the effects.
“SkyCity’s market capitalisation has fallen by around $1b since the Covid-19 outbreak took hold in China. While we acknowledge material near-term risks, this is substantially larger than our various scenarios of the risk/cashflow impact,” she wrote in the latest update on the stock.
