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The coronavirus pandemic’s prolonged impact on travel and major events that keep Las Vegas in business is taking a major toll on the employee headcount at MGM Resorts International.
The Las Vegas-based gaming resort company plans to lay off 18,000 employees — roughly a quarter of its entire pre-pandemic U.S. workforce — beginning Monday. The layoffs come nearly three months after Las Vegas resorts reopened from temporary shutdowns due to fears of spreading the virus. All of MGM’s Las Vegas resorts have reopened with the exception of the Park MGM.
“Nothing pains me more than delivering news like this,” MGM Resorts CEO Bill Hornbuckle wrote to staff in a letter obtained by Skift. “The heart of this company is our employees and the world-class service you provide.”
The layoffs come less than a month after MGM Resorts reported a $1 billion second quarter operating loss compared to a $371 million profit a year prior.
Federal law requires a termination date for furloughed employees who are not brought back within six months. August 31 is the six-month date for those impacted by the letter issued Friday.
MGM plans to keep laid off employees on a recall list and rehire them as demand returns, according to the letter.
Workers who return by the end of 2021 will maintain current seniority levels and regain benefits. Healthcare benefits for the laid off employees will run through the end of September.
“While the immediate future remains uncertain, I truly believe the challenges we face today are not permanent,” Hornbuckle wrote. “The fundamentals of our industry, our company and our communities will not change. Concerts, sports and awe-inspiring entertainment remain on our horizon.”
The job cuts are a sour end to a month that began with Barry Diller’s IAC/InterActive Corp. taking a $1 billion, or 12 percent, stake in MGM Resorts. That investment was driven more by Diller’s interest in MGM’s ability to build out its online gaming platform.
Many of Las Vegas’s typical lines of business have yet to reignite following pandemic shutdowns. June was the third consecutive month of no conventions in the city, and industry analysts say it could be another six to 12 months before event planners are confident enough to host another major convention in the city.
“I don’t want to predict  because I don’t feel I have enough insight into what might happen to the vaccine or the virus and no way to forecast that,” Las Vegas Sands Corp. President Rob Goldstein said during an earnings call last month. “But I would be less than honest if I didn’t tell you that Las Vegas is in a very difficult place.”