Despite the recent $1 billion investment from IAC, MGM has decided to lay off 18,000 workers due to the coronavirus pandemic. According to federal law, the giant operator explained that furloughed employees that have not been brought back after six months had to be laid off.
- MGM cut 18,000 furloughed employees due to COVID-19 impact.
- The layoffs arrive just after IAC made a massive investment in MGM.
- Could this mean an increase in online gambling jobs in the US?
MGM Resorts Lays Off 18,000 Workers
Before the unexpected spike in COVID-19 cases in the US, in addition to the 52,000 full-time employees, MGM Resorts International had about 18,000 part-time employees. Part-time workers were let go due to the virus’s impact on the land-based casino industry.
As MGM’s CEO Bill Hornbuckle explained it:
Federal law requires companies to provide a date of separation for furloughed employees who are not recalled within six months. Regrettably, August 31, marks (marked that) date.
When casinos closed in March, MGM was forced to close all its establishments and furlough about 62,000 of its employees. Even though it brought back over 50% of them, 18,000 still had to be left out. As MGM’s CEO said:
The near-term operating environment will remain challenging and unpredictable as COVID-19 case trends, health and safety protocols, and travel restrictions continue to impact our business heavily.
However, Hornbuckle clearly stated that whenever possible, MGM will reinstate employees.
While the immediate future remains uncertain, I truly believe that the challenges we face today are not permanent. The fundamentals of our industry, our company, and our communities will not change. Concerts, sports, and awe-inspiring entertainment remain on our horizon.
IAC Bets on MGM
This last sentence of that statement brings us to the question: does IAC’s $1 billion investment have anything to do with the layoffs? Just recently, MGM received a significant $1 billion boost by IAC. The media company purchased a 12% stake, rooting for the online gambling business and hoping to open new horizons for both companies. As IAC’s Barry Diller said:
MGM presented a “once in a decade” opportunity for IAC to own a meaningful piece of a preeminent brand in a broad category with great potential to move online.
MGM received a $1 billion investment by IAC (which has transparently stated that it would like for the company to move online), then moved on to lay off 18,000 employees. With an uncertain future, the company could possibly focus on expanding its online casino gambling presence.
All Eyes on Online Gambling
With this investment, MGM is put more firmly on investors’ map within the sports betting and online gambling environment. With the recent layoffs and IAC’s expressed desire to enter the online casino scene, expectations are that MGM intends to become a significant player in the industry.
With its shares rising 4.6% to $23.86 last Friday, it looks like investors grew more confident that the layoff of furloughed employees would help MGM cut costs and overcome the period of uncertainty. Whether MGM will continue on this path after the pandemic remains to be seen.
COVID-19 Pandemic Affecting Betting Jobs
The COVID-19 pandemic has hit several industries in the US, and the land-based casino has suffered immense consequences. Casinos were closed, then reopened with safety protocols, revenues went flat, and now employees are being laid off.
In the meantime, could this situation mean a boost in online gambling jobs? According to the US Labor Department, 14.5 million Americans, up from 1.7 million last year, are collecting traditional unemployment benefits to date. With the US online gambling scene on the rise, we can only hope things will change soon for the better.