MGM Resorts has announced it will lay off 18,000 of its U.S. workforce that was already furloughed due to the coronavirus pandemic, according to The Wall Street Journal.
The job cuts were prompted by the global slowdown in travel that continues to hurt the industry, the casino giant said, adding the layoffs will begin Monday.
The thousands of workers being let go represent about one-fourth of the 68,000 the company employed in the U.S. before the outbreak shuttered operations in March, the Journal reported.
Federal law requires MGM Resorts to give advance layoff notices to furloughed workers if they hadn’t been brought back into the workplace after six months, Chief Executive Bill Hornbuckle wrote in a letter to workers.
“While the immediate future remains uncertain, I truly believe that 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 company could rehire workers when business starts rolling again, and employees who get their jobs back before the end of 2021 would keep their seniority and immediately resume benefits, the company said.
Nevada casinos reopened June 4 at 50% occupancy, and from there MGM Resorts reopened gradually over the next few weeks, the Journal reported.
In July, gambling revenue was down 39% on the Las Vegas Strip compared with 2019, but casinos still raked in about $330 million compared with nearly $543 million a year earlier, the Journal reported.
The tourism, travel and hospitality industries have struggled to gain stability as a major resurgence of the virus gripped the country in recent weeks.
Just more than 1 million Americans applied for unemployment benefits last week, a sign the pandemic continues to threaten jobs even as the housing market, auto sales and other segments of the economy rebound from the springtime collapse, according to The Associated Press.
The Labor Department reported Thursday the number of people seeking jobless aid last week dropped by 98,000 from 1.1 million the week before.
The number of initial claims has exceeded 1 million every week but one since late March, an unprecedented streak. Before the coronavirus pandemic, they had never topped 700,000 in a week.
“Layoffs are ongoing reflecting interruptions to activity from virus containment that are likely resulting in permanent closures and job losses,’' Rubeela Farooqi, chief U.S. economist at High Frequency Economics, wrote in a research report.
U.S. employers added 1.8 million jobs in July and the unemployment rate in July was 10.2%, the Journal reported.
— Information provided by The Associated Press was used to supplement this report.
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