LAS VEGAS (FOX5) -- Multiple Las Vegas Strip casinos notified staff of furloughs and possible permanent layoffs after the COVID-19 pandemic had a massive impact on the casino industry.
As part of the Worker Adjustment and Retraining Notification Act of 1988 ("WARN" Act), companies are required to notify employees in advance of potential mass layoffs or furloughs.
Several casino companies and tourist-focused companies in Las Vegas have sent WARN Act notices to staff and the state unemployment agency since March.
In a WARN letter filed July 23, M Resort manager Hussain Mahrous informed the state of additional layoffs. The Henderson casino said they were planning to lay off 328 employees on August 15, with a notice last week adding an additional 24 employees for the same time period.
Mahrous wrote the following:
These layoffs at LVGV, LLC dba M Resort Spa Casino are the unfortunate result of COVID-19 related business circumstances that were sudden, dramatic and beyond our control. The impact on our business was not reasonably foreseeable until now. We simply could not foresee, that the initial closures of our properties, that were issued by one or two states for a limited period of time, ultimately spread throughout all the states in which we operate and eventually be extended, interrupting almost all business and travel temporarily. These significant drags on our business will likely continue for the foreseeable future. Finally, we could not have anticipated when our properties would be allowed to reopen and how restrictive the new operating conditions would be, and the negative impact this would have on business volumes. As a result of all of these unfortunate circumstances, we are notifying you of this decision as soon as we practically could, taking into account the great difficulties our entire industry faces in projecting future staffing needs under these unprecedented circumstances.
Entertainment workers are facing permanents layoffs as MGM Resorts continues to cancel live performances at its properties.
According to a letter sent to Entertainment & Sports employees from MGM Resorts, the company has canceled all in-person performances through August.
"As you were previously informed, MGM Employees who are not recalled on or before August 31, 2020 will be separated from the company on that date and it now looks like that will unfortunately include the majority of employees working in our division," the letter, signed by the president of the division George Kliavkoff, said.
A spokesperson with MGM Resorts confirmed the validity of the letter but declined to provide further comment or confirm the number of employees impacted.
“Given that it is unlikely that concerts and other entertainment events will be returning to Las Vegas in the next month, it has unfortunately impacted the employees who support those shows. We’ve pledged to be as transparent and supportive as possible with employees and are working to reduce the impact and help them moving forward. We’re continuing to coordinate with public officials and look forward to the time when we can bring back employees to support our entertainment offerings and relaunch entertainment for our guests", said MGM Resorts.
Currently enrolled employees will continue to receive healthcare benefits through Aug. 31. MGM Resorts is also offering emergency grants to separated employees through Nov. 29.
Wynn Resorts has notified some staff members that they have been placed on furlough.
A spokesperson for the company provided the below statement on the furloughs:
Although we retained all of our people while we were closed, we now know how challenged business volumes in Las Vegas are and are staffing to the significantly reduced demand.
The company had paid all salaried, hourly and part-time employees through May 31, for a total of 75 days of payroll continuance, amid the COVID-19 shutdown.
According to a news release from Wynn Resorts in May, more than 15,000 current Wynn and Encore employees received payroll coverage, which included the average tip compliance rate or distributed tips/tokes for tipped employees.
In total, the release said, Wynn Resorts was investing close to $250 million in payroll expense during the closure.
FOX5 also learned that some staff had also recently faced pay cuts. According to information provided to FOX5 that was confirmed by Wynn Resorts, the pay reduction ranged from 5% to 20% based on the staff member's salary. Salaries under $75,000 started at 5% reduction.
A number of how many employees were impacted by the furloughs was not immediately provided by the company.
The company said the furloughed employees will continue to receive health benefits through Oct. 31.
Circus Circus said they decided to lay off some employees due to decreased business since the pandemic. According to a letter sent to the Nevada Department of Employment, Training and Rehabilitation, 252 employees will be permanently terminated, effective Sept. 1.
Impacted positions include guest room attendants, table game dealers and retail sales associates, the letter said.
A statement from Circus Circus read:
Circus Circus Las Vegas has had to assess and make business decisions in order to effectively operate during these uncertain times. We hope that business volumes will recuperate sufficiently so that most of our employees can get back to work in the near future.
Despite Tropicana opening on Sept. 1, some employees will be laid off before the doors reopen.
Penn National Gaming, which owns Tropicana, said in a statement that the company furloughed 26,000 total employees in March. While "a number" are expected to return for reopening, some of those furloughs are expected to become permanent layoffs.
Senior Vice President of Public Affairs and Government Relations Eric Schippers said in a statement:
Based on the sudden and unforeseeable events in March, we were forced to furlough 26,000 of our team members in April. At the time, we were hopeful that we’d be able to call the employees back within a couple of months. However, while we have been able to reopen most of our properties on a limited basis, the continued social distancing requirements and uncertain business volumes means our properties will not be able to resume normal operations for the foreseeable future.
After thoroughly reevaluating our business in light of the ongoing pandemic, we wanted to communicate honestly and openly with our team members that it could be some time before all of our remaining properties are open, and that those properties that are open will unfortunately not require the same level of staffing due to limitations and restrictions placed on occupancy and offerings to create a safer environment. As a result, we informed our team members that their furloughs may be converted to a permanent layoff in the coming weeks or months. We had a legal obligation to send a formal WARN notice to all the team members who could potentially be laid off. To be clear, however, that does not necessarily mean that all those team members will be laid off.
In the meantime, we also wanted to let the furloughed team members know that we’ll be extending their Medical and Pharmacy benefits coverage through July 31. In addition, our COVID-19 Emergency Relief Fund, in which we’ve raised $1.7 million through private donations from our senior executives, Board of Directors, and our Foundation, is also available to help our Team Members with any emergency funding needs. To date more than $700,000 has already been approved and processed for distribution to our team members in need.
These are extremely challenging times both on a personal and a professional level, but the steps we have taken to this point, and plan to take going forward, are all aimed at positioning our Company and the majority of our team members to be able to weather this storm and come out stronger on the other side.
ELARA BY HILTON GRAND VACATIONS
Hilton Grand Vacations sent the Nevada Department of Employment, Training and Rehabilitation a WARN Act notice on July 3, notifying the agency of 386 furloughs within the property at 80 E. Harmon Ave.
The letter also states "for the most part, operations at the property" have been ceased, but that it anticipates "fully reopening the property when the climate allows sometime in the future."
The letter, written by the company's senior director of team member relations, said furloughs were initially done on March 27, and as of July 1, "the furloughs now may, or may not, extend beyond 6 months." The company said they still anticipate the furloughs to be temporary.
"The speed and vast reach of the COVID-19 pandemic, as well as the State’s continued extension of its initial closure orders and the phased reopening plan has forced us to re-evaluate our plans. Recently issued State guidance regarding the phased reopening makes it clear that the impacts on the hospitality industry in Nevada will be for an extended period of time and drastically impact the Company’s business and ability to continue operating at this time," the letter said.
"Similarly, State and local guidance on business opening plans make clear the Company’s unique set-up will pose challenges that will require significant and potentially lengthy structural changes at this juncture. In addition, the recent surge in COVID-19 cases in Nevada makes it clear now that there will be additional challenges posed to the travel and hospitality industries in Nevada."
The furloughs included 131 housekeeping employees, 39 front desk employees, 55 sales executives and 23 employees of the pool bar.
NELLIS CAB COMPANY
Nellis Cab Company, stationed at 5490 Cameron Street, notified 160 employees in March for temporarily furlough.
According to a letter to DETR on July 17, the company said the layoffs would become permanent as of September 19.
"Initially, as set forth in our March 20, 2020, communication to employees announcing temporary layoffs, Nellis did not expect it would be permanently laying off these employees; instead, we expected their layoffs would be for less than six months," the letter stated.
The company's general manager wrote taxi demand didn't return as fast as they expected with the June 4 reopening of gaming properties. Michelle Langille wrote the reason for the layoffs was the "resurgence of the coronavirus and the difficulties in containing it."
In addition to the layoffs, Nellis Cab Company notified 135 employees they may not be recalled to work within the six month period that began March 20.
"We are extending these employees’ temporary layoff period for the same reasons that we are implementing the permanent layoff of 160 employees; specifically, the business circumstances that we now face were not reasonably foreseeable when the initial temporary layoff notice was given," Langille wrote.
TRACKING JOBS IN SOUTHERN NEVADA
Since the initial shutdown order due to the COVID-19 pandemic, several companies have notified employees of mass layoffs or furloughs.
However, many of the employees notified had been recalled to work since the initial notice and gradual reopening of gaming properties in the city. Other companies issued follow-up notices changing furloughs to permanent layoffs.
MARCH: Hakkasan Group, Caesars Entertainment, OYO Hotel & Casino, Renaissance Hotel, Westin Las Vegas Hotel and Spa, Tahiti Village Resort, Treasure Island, Hard Rock, Cirque Du Soleil, Wyndham Vacation, Hilton Grand Vacations, The Cosmopolitan of Las Vegas, Red Rock Resorts, Eldorado Resorts, Tuscany Suites and Casino
APRIL: Tao Group, Trump International Hotel, Hyatt Place, Affinity Gaming, Planet Hollywood, Golden Entertainment, Aquarius Gaming, Rampart Resorts
MAY: Avi Resort, Station Casinos, MGM Resorts International, Silverton, Circus Circus, McCarran International Airport Slot Concession, South Point Hotel, Boyd Gaming, Mesquite Gaming, Drai's Group, Casino Royale
JUNE: Las Vegas Marriott, Peppermill Casinos, Harrah's Reno, Penn National Gaming, M Resort, Cactus Pete's, Sahara Las Vegas
JULY: Cirque Du Soleil, Cactus Pete's, The Cosmopolitan of Las Vegas, Odwalla's Sparks, Terrible's Casino, Allegiant, United Airlines, Circus Circus, Tropicana Las Vegas, T-Mobile, Maverick Aviation Group, Penn Gaming, Nellis Cab Company, Hilton Grand Vacation, MGM Resorts
Complete numbers of furloughed, terminated and recalled employees for Southern Nevada were not yet available.
DETR said about 953,000 people had filed initial claims for Pandemic Unemployment Assistance, the unemployment claims for those who are contracted or self-employed workers under a 10-99 tax form.
Las Vegas saw positive job growth in June, as compared with May, after the reopening of certain sectors in the city.
In June, the Las Vegas Metropolitan Statistical Areas (MSA) grew by 8.7%, primarily in the hospitality and leisure vocations, according to DETR.
"While encouraging, it is important to remember that conditions have changed since the middle of June, and the evolving public health landscape and necessary restrictions may continue to impact Nevada’s labor market for several months to come,” DETR Chief Economist David Schmidt said in a statement.
Las Vegas had an unemployment rate of 18% for the month of June, down from May's 28.8% and April's high of 34%.
This is a developing story. Check back for updates.