Covid 19 Coronavirus: SkyCity plans to shed another 700 staff

Casino operator SkyCity Entertainment Group has revealed "incredibly difficult" plans to slash another 700 jobs which a union says is mainly in Auckland and almost a third of the approximately 3000 part and full-time jobs there.

The company is blaming "weaker economies, lower personal disposable income, changed entertainment habits, restrictions on mass gatherings and physical distancing requirements" and long-term travel restrictions for the decision.

SkyCity chief executive officer Graeme Stephens said the company had already restructured its management team and its salaried employee base.

"Unfortunately SkyCity now expects to reduce its workforce further," he said today.

"We will commence consultation on a proposal to reduce the number of rostered (waged) staff by around 700 to ensure our business is prepared to operate in the new environment."

Stephens said the decision was "incredibly difficult for all involved".

Joe Carolan of Unite Union said the jobs were mainly in Auckland where SkyCity had between 2500 and 3000 part and full-time staff so 700 cuts could be about a third of the staff. Cleaners, bar and cafe staff, hotel and gaming worker roles were all involved.

"We've know this is going to happen for weeks. We've been involved in this one and got a very good redundancy clause in there so people will get up to half a year's payment if they've been there 20 years or longer. It's four weeks pay for the first week and two weeks pay for every subsequent year."

Carolan said despite the prospect of New Zealand moving to alert level 2 when SkyCity's Auckland bars, restaurants, casino and gaming areas could operate, "it's the drop in international business which has caused these job losses, plus social distancing and societal behaviours - people will have a lot less disposable income to spend."

Unite had also been working with SkyCity on new health and safety measures when properties re-open: "Only three players for every one dealer, more security personnel, controlled access to areas, screening, tracing," Carolan said of measures being discussed.

Fewer people in lifts, stop-go people flow movements along corridors and common areas and dividing the properties so no more than 100 people were in any area at once were measures Carolan cited.

In early April, the company announced about 200 job cuts to reduce costs, saying the Covid-19 crisis had caused "an unprecedented impact on people, businesses and the global economy" and Carolan said the union was not involved in that announcement.

"We will need to reduce our headcount to a level more commensurate with our anticipated levels of trade once we reopen. This will lead to redundancies for approximately 200 of our people and we will be starting this process with immediate effect," SkyCity said in early April.

SKyCity has revealed a plan to slash 700 jobs.

Last week, the Herald reported SkyCity had suffered a $1 billion hit to its NZX market capitalisation from Covid-19 and might soon suspend dividends and raise new capital, an analyst says.

Chelsea Leadbetter, of Forsyth Barr equity research, said that although the business was strong, the pandemic had dealt it a major financial blow and shareholders could soon feel the effects.

"SkyCity's market capitalisation has fallen by around $1b since the Covid-19 outbreak took hold in China. While we acknowledge material near-term risks, this is substantially larger than our various scenarios of the risk/cashflow impact," she wrote in the latest update on the stock.

Under the Work and Income wage subsidy scheme, SkyCity Management got $21.7m for 3272 employees, as of May 3.