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SkyCity to axe 700 more jobs amid Covid-19 economic turmoil

Casino operator SkyCity will axe a further 700 staff following a slowdown in business due to Covid-19

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The job cuts come on top of the 200 that were lost month at Sky City. Source: 1 NEWS

The redundancies of the waged staff come after around 200 salaried SkyCity workers lost their jobs last month. SkyCity at the time said their waged employees jobs were safe, but could be on the line in the coming weeks.

In a statement today CEO Graeme Stephens said: “For a company that is centred around its people, this is incredibly difficult for all involved.

"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."

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Around 200 jobs have been cut as the company tries to reduce costs through the coronavirus crisis. Source: 1 NEWS

He added: "At SkyCity we are a family and it is incredibly tough to say goodbye to valued team members, however, we need to ensure our business is best prepared to operate in the new environment.

"These difficult actions will help to create a business that is sustainable in the medium and long term and one which can continue to support the thousands of jobs that will still remain."

Weaker economies, lower personal disposable income, changed entertainment habits, restrictions on mass gatherings and physical distancing requirements were cited as reasons for the impending job losses.

SkyCity said it would be reopening as a smaller, domestically-focused business as travel restrictions will likely continue in the long-term.

“We will be working with those potentially affected, their managers and the unions and expect the process to take some weeks,” said Mr Stephens.

Executives were taking a 40 per cent pay cut and capital projects are being put on hold to try and save money.

SkyCity said it paid its waged staff 80 per cent of their earnings with the help of the Government's wage subsidy. The Ministry of Social Development’s website showed SkyCity Management Limited claimed nearly $22 million for 3272 employees.

SkyCity said it lost around $90 million a month in revenue but continued to have outgoing costs.

In a May 1 NZX release, SkyCity reported it was continuing "various key development projects" including the refurbishment of premium gaming rooms in Auckland, a new food venue and entertainment centre near its main casino in Auckland and refurbishment of part of its main casino floor in Hamilton.

"SkyCity continues to have a strong liquidity position with around $400 million of cash and undrawn debt facilities currently available. SkyCity does not expect to require any waivers for its 30 June 2020 debt covenants," it said.

"Following recent restructuring initiatives, SkyCity’s operating cash requirements (before re-opening any properties) are around $12 million per month. SkyCity also has significant ongoing capital expenditure commitments on its two major projects and other smaller development projects in Auckland and Hamilton.

"SkyCity continues to progress the development of a funding plan to support the business over the medium-term as it recovers."

It said it was planning a re-open during Alert Level 2 on reduced hours.

Meanwhile, SkyCity said its online casino continued to operate "positively over the past two months.

"Customer registrations have shown strong growth with over 15,000 registered users now on the site."

Its downturn also comes after a large fire destroyed the under-construction SkyCity convention centre last year, another major expense for the company.