Casino giants put numbers on layoffs this year

By Liz Benston

Saturday, Nov. 1, 2008 | 2 a.m.

Casinos laid off more than 10,000 people after the 9/11 attacks, when half of Las Vegas’ tourism business vanished overnight.

Those layoffs crashed down like a Level 5 hurricane. But this economic downturn has brought smaller, yet persistent waves of layoffs, claiming a few dozen jobs, or a few hundred, with each swipe.

Those numbers are adding up to thousands at a time when many employers aren’t filling jobs vacated by retiring, laid off or departing workers.

The Culinary Union estimates that up to 10 percent of its 55,000 members in Nevada, including casino housekeepers, bussers and cocktail servers, have lost jobs or had their work hours reduced in the downturn.

MGM Mirage, Nevada’s largest employer, has reduced its full-time workforce by more than 1,000 in Nevada over the past year, and Harrah’s Entertainment, the world’s largest gaming company, has laid off about 2,000 workers in the state since January.

Hundreds have lost jobs at other gaming companies around town. And layoffs have accelerated in the past few weeks, the Culinary Union says.

“Workers who are affected are upset and workers who aren’t also are upset for their co-workers,” Culinary Union Secretary-Treasurer D. Taylor said. “I don’t think companies particularly like to do layoffs but with their debt load and obligations” they have to act.

Culinary contracts require that companies eliminate workers with the least seniority first. Laid off workers are added to an on-call list and get first priority for those jobs once business picks up.

The question for casino workers is when that will happen.

“No one can tell us when this is going to end, so we’re preparing for the worst and hoping for the best,” Taylor said.

Starting Nov. 7, the Culinary will gather various agencies in the union’s main hall to assist displaced workers. Workers will be able to file unemployment claims, speak to water, power and gas companies about bill-pay services, receive information about continued health care coverage, speak with housing assistance agencies and sign up for food baskets.

“We want to make sure folks out there aren’t alone in this,” Taylor said.

After first reducing workers’ hours, MGM Mirage and Harrah’s have stepped up layoffs in recent months as business has worsened. They and most other gaming companies are following a broad mandate to cut operating costs in the wake of earnings that have fallen roughly 20 percent or more in recent months.

These layoffs follow previous cuts, many of them corporate-level jobs, to streamline their businesses after mergers that resulted in duplicative systems and departments.

In many cases, full-time jobs are becoming part-time jobs where people are called in as needed. Some employees are working four-day weeks, others a couple of days a week and some aren’t getting called at all.

With business down, the company has “no choice” but to “take costs out of the business,” said Jan Jones, Harrah’s senior vice president of communications and government relations.

Depending on their expenses and business volumes, some departments are reducing costs by as much as 50 percent, others by 20 percent or 30 percent — reductions that include payroll as part of the bigger picture, Jones said.

Pinning down exact figures has been difficult, in part because both companies say such numbers aren’t predetermined. Decisions about how to best cut costs are left up to the executives and managers of individual casinos, they say.

“This is a very fluid thing,” MGM Mirage President and Chief Operating Officer Jim Murren said. “We’ve gone through organizational charts and staffing levels in each department of each property and challenged ourselves to operate these businesses more efficiently and appropriately given the volumes we’re getting.”

Many bosses and the rank and file who still have jobs are facing the same new reality: that they are doing more for the same pay — or perhaps less, if they earn tips. Some of these employees are competing with out-of-work peers for new jobs.

While hourly workers who have lost jobs scramble for work, directors and managers higher up the food chain have some breathing room. In many cases, they are receiving buyouts or severance packages, though such checks may be relatively small for lower-level managers, especially as companies focus on lowering expenses.

Some executives who have recently lost jobs seem confident that they will be able to find work elsewhere in gaming.

“They say they’re taking a long, deserved vacation before starting their search,” said Marc Weiswasser, a senior vice president with CasinoRecruiter.com, an executive search firm in Las Vegas.

Weiswasser has advised his clients to be cautious, and proactive, by taking less-than-ideal jobs that might involve a step down and a pay cut because “it’s easier to get a job when you have a job.”

But many clients refuse because “they think they’re worth more” and believe “this drought can’t last forever,” he said.

This consumer downturn bears little resemblance to that after 9/11, the last significant gaming slump, when many casinos were fully staffed a few months after the attacks. The ripple effect throughout Southern Nevada’s growth sectors, including construction and real estate, has been dramatic.

“We hope that after the election that maybe things calm down” and the economy picks up, Jones said.

“We’re in a turbulent economic storm and our goal is to have the strongest ship possible to ride out the storm,” Murren said. “We clearly have a responsibility to the state, the community and shareholders to be as strong as possible.”