MGM Resorts International, on Friday, announced that it would issue notices of terminations to 18,000 U.S. workers who were subjected to furloughs and as a travel slump around the world affected the casino industry's recovery from the ongoing coronavirus crisis, The Wall Street Journal reported.
In the letter by MGM Resorts chief executive officer Bill Hornbuckle, thousands of the resort hotel's staff will have their employment contracts terminated starting Monday.
The massive job cuts, which represent a quarter of MGM's 70,000-strong headcount, come five months after the pandemic shut down the once-bustling Las Vegas Strip and many other entertainment hubs the United States, crippling the tourism industry and rendering a huge chunk of the hospitality sector without work.
Based on a U.S. Department of Labor report early this month, American companies added 1.8 million employment opportunities in July, but the U.S. still had roughly 13 million fewer jobs compared to figures in February. July had a jobless rate of 10.1 percent.
In the letter, Hornbuckle said MGM is required by the government to send notices of job cuts to furloughed employees who have not been called back for duty after six months. But, the company said it is considering to rehire those employees as business normalizes. MGM said it will also retain the workers' health benefits until the end of next month.
Las Vegas has been battered by the virus. The volume of people visiting "Sin City" dropped more than 60 percent last month, while its foot traffic from conventions and other similar events plunged to zero, the Las Vegas Convention and Visitors Authority reported.
Resort hotels have been gradually back in business since they were given the go-signal by authorities in June. But, visitors can only do so much in terms of enjoying their stay because there are not too many shows or sporting events being held.
Shares of MGM rose early Friday but hit a session peak after news of the layoffs. The company's stock soared as much as 6.4 percent to $24.27 in New York but fell more than 30 percent this year through Thursday's final bell.
In the face of the ongoing pandemic-triggered shutdown, real estate owners in Las Vegas estimated a gloomy financial future: a huge drop in sales, hotel, restaurants and entertainment event cancellations and postponements of convention bookings.
According to Hornbuckle, notifying his employees about the retrenchment is very painful, who stressed that the "heart" of MGM is the employees and the unparalleled commitment and service they provide, CNBC disclosed.