Wednesday, July 18, 2001 | 11:17 a.m.
NEW ORLEANS -- About four months after getting a major tax break from the state to stay open, Harrah's New Orleans Casino on Tuesday cut 148 jobs, saying the reductions were needed to match the demand of its customers.
The move immediately drew heat from elected officials, as well as a longtime opponent of the gambling hall.
The casino had threatened to close until the Legislature cut its minimum state tax from $100 million to $50 million annually and gave it permission to have expanded restaurants and its own hotel with discounted rooms.
Casino officials said the reductions would leave 2,575 employess, including 2,359 fulltime employees and would be within the minimum employment range required by state law.
As of March 8, the casino had 2,734 employees.
The casino is owned by JCC Holding Co. and is managed by a subsidiary of Harrah's Entertainment Inc., which owns 49 percent of JCC Holding. The cuts were due to the closure of 11 of the casino's 110 table games and follow an industrywide trend of gamblers turning more and more to slot machines, officials said. The casino has 2,600 slot machines.
"These changes will allow JCC Holding and Harrah's Entertainment to have a long-term viable business," said Anthony Sanfilippo, central division president of Harrah's Entertainment and a member of the JCC Holding board.
The majority of the terminated workers were in the table-games section, but the cuts affected almost all aspects of the operation, said casino general manager Bill Noble.
Noble, said the cuts were made after an extensive study lasting several weeks. Changing the gambling floor to meet customer demands will enable the casino to concentrate on other aspects of development, such as its now-vacant second floor.
"The goal at that time will be to hire more people," Noble said.
Under a law passed this year, the casino is required to have a minimum of 2,460 employees, or 10 percent of what it employed in early March. Legislative boosters pushed the tax concession package for the casino largely under the banner of protecting jobs.
Noble said the penalties for going under that figure have not been spelled out, but could include the loss of the casino's license. The city has an employment minimum of 2,550, but the only penalty is an enhanced outplacement service for displaced employees if the figure falls below that number, Noble said.
Rep. Danny Martiny, R-Kenner, said he was disappointed that the casino official who dealt with the Legislature, former JCC Holding chairman Fred Burford, recently left the company as part of a management shakeup that brought the casino more under the control of Harrah's Entertainment.
Martiny said he was not suprised by the cuts and the casino's statement that it was overstaffed.
"Take that issue out by itself, and it's not that major. But taking the entire series of events over the past year, it's disturbing," Martiny said.
New Orleans Mayor Marc Morial said his administration would hold up the last remaining piece of business from the concessions package -- approval of a $5 million reduction in casino payments to the city -- until the city has time to verify the employment figures.
"We're all very disappointed that Harrah's has chosen to lay off workers at this time, so close after their strong affirmation to their own employees and the city," the mayor said.
Longtime gambling opponent C.B. Forgotston said the casino had delayed implementing job cuts until it got what it wanted from the state. During the legislative session, casino employees rallied at the Capitol in favor of the concessions package.
"It is most unfortunate for those laid off," Forgotston said. "They were clearly used by Harrah's to get a $50 million tax break and then dumped. I wonder if the legislators had known about the layoffs would they have voted for the tax break? What's next? Another tax break?"
But Sen. Ken Hollis, R-Metairie, said the casino has failed before because of government "micro-management," and such layoffs are part of normal business. He said the state has put a practical employment minimum into the law which balances out against the concessions the Legisalture made.
"Once they increase their restaurants and their hotel comes aboard, they'll hire more people," Hollis said. "It's nothing to panic about ... But it was good business on the part of the state to say that you can't lay off more than 10 percent of those employees."
The casino's drive to get state concessions started slowly, but acclerated after JCC Holding filed for bankruptcy protection and Gov. Mike Foster pushed for the tax cut, saying the state could not afford to lose the jobs.
archive
