ThE ECONOMY:

Harrah’s makes cost-cutting moves

Company ending employer contributions to 401(k) plans, trimming manager salaries

Thursday, Feb. 12, 2009 | 12:46 p.m.

Harrah’s seeking $740 million from credit line (2-13-09)

Following similar cost-cutting moves by other casino giants, Harrah's Entertainment has ended company contributions to employee 401(k) plans and is trimming managers' salaries by 5 percent.

The salary cuts apply to thousands of managers who are eligible for bonuses.

Over the past year, Harrah's has laid off at least 2,000 employees and has reduced workers' hours. The company has struggled from lack of business, exacerbated by interest owed on billions of dollars in debt accumulated when the company went private. The economy had already begun to soften when the deal, struck during the real estate boom, closed in January 2008.

The cost-cutting moves are designed to "preserve as many jobs as possible" amid the plummeting economy and are temporary until the economy improves, spokesman Gary Thompson said.

Harrah's, which has roughly 75,000 employees, informed workers about the moves Wednesday by distributing memos and holding meetings.

Discussion: 9 comments so far…

By gqbossing

2/12/09 at 1:02 p.m.

Suggest removal

This affects 2700 people across the world, Legal, Accounting, IT, property management, etc.. . They are estimating a cost savings of $80M annually, although I'm not sure where that number came from.

It's definately better than laying off another 200-300 people like in the past, but one begs to wonder bigger picture if things like this are inevitably leading to deflation.

It seems to me the buying power is disappearing and I cannot see how prices are going to be propped up when even those with jobs are making less, and those who find other jobs are for less...
By matts7052

2/12/09 at 1:23 p.m.

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Is anybody stunned or even moderately surprised? How on earth have they waited this long with their debt load!?!
By chazbean

2/12/09 at 1:33 p.m.

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How about selling one or two of their Casinos to reduce debt!
By neiman1

2/12/09 at 3:24 p.m.

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Thank you Pres. Obama. Your stimulus with harry Reid helping out has done nothing for Nevada and your pronouncement that Las Vegas is an extravagance will lead to thousands more being laid off. All those employees houses will now be foreclosed or boarded up or both.
By neiman1

2/12/09 at 3:32 p.m.

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I wonder how many of these worker's agree with the Sun's editorial the mayor is over reacting. How many benefits, salary , and jobs will be lost with the "innocent" reference the President made about Las Vegas.
By matts7052

2/12/09 at 4:40 p.m.

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Neiman, you are delusional. Do you really think the President should have applauded companies that received bailouts using that money to throw parties for employees in Vegas?!? If Vegas has to depend on the handful of banks that received bailout money to keep it afloat through convention business, we got bigger problems than we know about. Sheesh...
By FRANKIE

2/13/09 at 3:35 p.m.

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dude this is a bush thing obama's stimulus hasn't even passed
By johnevegas

2/13/09 at 4:10 p.m.

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neiman "Your stimulus with harry Reid helping out has done nothing for Nevada"

Maybe because it doesn't exist yet?

Neiman, buy a watch. Ask someone to set it to current time for you. Check it often. Live in the now.
By perry161492

2/14/09 at 6:40 a.m.

Suggest removal

if we bailed out these company why should go out have BIG PARTY on use f those company if theye don't want the government to tell them what to do gives us back OUR MONEY and let them do whatever they want and don't ask for money.

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