Australian Casino Layoff Numbers Become Clearer
On a global scale, Australia has done an admirable job of keeping the number of coronavirus deaths down. With approximately 6,500 positive cases and little more than 50 deaths, Australia ranks 34th in the world for the former and even further down the chart for the latter.
According to the Guardian’s numbers, the number of daily new cases seems to have peaked during the last week of March, almost as soon as the lockdowns went into effect. The curve has been almost steadily decreasing ever since, with the last several days producing less than 50 new cases per day.
This doesn’t mean that Prime Minister Scott Morrison is easing restrictions immediately, but he is leaning in that direction. Some areas of Australia are ready to begin opening things back up cautiously by the end of April. Schools and restaurants are likely the first to make those efforts.
Casinos, on the other hand, are not likely to reopen this month. But if Australia’s numbers continue to decrease, they may reopen in May. It is all on a wait-and-see basis at this time.
Staggering Numbers
The number of Australians out of work – some permanently – keeps rising. The casino industry is not immune to that situation and continues to stand down more employees.
The latest Reuters report shows that Crown and Star together have stood down about 20,000 members of their employee pools.
Crown Resorts, specifically, laid off 95% of its employees, some on a temporary basis but some permanently. Star stood down about 90% of its employees. And SkyCity Entertainment stood down more than 1,100 employees in Australia and New Zealand.
Meanwhile, Crown continues to move forward with the construction of its Sydney project, explaining that it currently employs about 1,300 construction-related workers and will employ approximately 2,000 people when it opens. And Crown’s senior management, including the CEO and directors, took 20% cuts in fees.
Crown Updates Regarding Workers
In the latest Crown Resorts media release, the company first addressed its workforce – or former workforce, in many cases.
The notice said the stand-down process is “substantially complete” at approximately 11,500 employees out of work. Crown did provide two weeks’ worth of pay to both full-time and part-time employees in all positions outside of senior management. Eligible casual workers received a $1,000 payment. Employees can also use any existing leave entitlements.
In the hopes of further helping those employees, Crown registered with the Commonwealth Government for a JobKeeper payment. More updates will follow in the coming days and weeks.
Crown Funding Holds Up
The media release also noted that Crown entered into new bilateral facilities with relationship banks for $560 million. The current cash balance is $500 million, and the company maintains the ability to secure more than $1 billion in additional debt facilities.
Crown has also been working with the Victorian and Commonwealth governments to support initiatives in communities, such as Victoria’s program to provide safe and free accommodations to those needing a reprieve from domestic violence during quarantine.
The company also donated nine tonnes of produce in Victoria for the creation of packaged meals for the Salvation Army and others feeding underserved members of the population.
Crown has made hundreds of rooms available to people who needed to quarantine after returning from any travel – 950 rooms in Melbourne and 600 rooms in Perth.
Star Addresses Mitigation
The Star Entertainment Group’s announcement focused primarily on the business side. IT is strengthening its balance sheet, preserving liquidity, etc. The Star, too, enrolled in the JobKeeper program offered by the federal government.
The company executed debt funding with existing relationship banks for $200 million. It also secured agreements with debtors for a full waiver through June 30, 2020.
On the last page of its release, it addressed its 90% of stood-down employees. Chairman John O’Neill AO said:
“These unprecedented challenges have had a considerable human impact. To temporarily stand down more than 90% of our dedicated workforce will be the most painful decision our senior management is ever likely to encounter. As a Board, and as a management team, there was no hesitation in reducing directors’ fees and senior executive salaries.”
Stocks on the Rise
While few employees that have been stood down are watching the stock market, casino management is laser-focused on those numbers.
As for Crown, since its low point of $5.90 on the Australian Securities Exchange on March 20, its share price has continually risen. It landed just above $8.00 for the week.
The Star’s low point of $1.565 hit on March 25 but also made somewhat of a comeback in the weeks since. It closed the week at $2.62.
Both companies have had other issues that affected their share prices in 2020, but the coronavirus pandemic hit them harder than they could have anticipated.
