Retirements and part-time models
The implementation of the controversial ReFIT plan is currently the number one topic at the state-owned Casinos Austria. Against the background of the effects of the Corona crisis, the plan is intended to reorganize and increase the efficiency of the company. Ensuring profitability and strategic realignment are the top priority. However, the plan is accompanied by significant job cuts.
At the end of September, the casino chain registered 600 of its approximately 1,700 employees with the Austrian AMS (Labour Market Service) for termination. After further negotiations with the works council, which massively criticized the plan and found the presentation of the loss figures to be exaggerated, it is now clear that 350 full-time positions will be cut. This should save 45 million euros.
The job cuts should largely be generated through amicable solutions, retirements and part-time models. According to company management, discussions with employees are currently being conducted and evaluated. A rescue package of this magnitude is necessary given the current exceptional situation; the company must be made fit for the future, according to the supervisory board's credo.
Robert Chvatal, CEO of the Sazka Group, who was elected at the last meeting to succeed Walter Rothensteiner as chairman of the supervisory board, put the situation positively: ReFIT could save over 1,200 jobs. In addition, the 12 casino locations can also be retained, and salary costs will be reduced by 15 to 20 percent. The Czech Sazka Group became a shareholder in Casinos Austria as a result of a bidding war and now holds over 55 percent.
Does job cuts only help shareholders?
This view is represented by works council leader Manfred Schönbauer, who assesses the company's management and control much less succinctly than Robert Chvatal. The job cuts cannot be completely prevented, but as a works council you can do everything imaginable to make this more socially responsible. Schönbauer therefore welcomes the introduction of part-time models and the implementation of retirements in principle.
What the future employee models will look like is still unclear. Many details are still pending. However, they have already agreed to reduce working hoursigt in order to save jobs. Anyone who reduces their workload by 50 percent should still receive 60 percent of their salary. Good conditions were also achieved for voluntary dropouts. Up to 39 gross salaries will be paid as severance pay.
However, the works council boss does not have a fundamental understanding of the dismissals. 2019 was the most successful year ever for Casinos Austria, said Schönbauer. A large part of the income was again generated in online business, which has also proven useful in times of crisis. The ReFIT program therefore only serves to increase the dividend and has no other economic benefit.
The Supervisory Board, however, states that the losses without ReFIT will amount to 65 million euros by 2021. Not only Corona, but also a smoking ban that has been in effect since November 2019 is causing burglaries. In addition, the Winwin arcade brand and the foreign subsidiary Casinos Austria International would make losses. Total gaming revenue is said to have fallen from EUR 87.3 million to EUR 52.8 million in the first half of 2020. Only the lottery and the online gambling site win2day have still generated profits.
Is management not affected?
So far, the supervisory board has not mentioned anything about the extent to which management is influenced by the Savings is affected. The annual gross salary of managing director Bettina Glatz-Kremsner alone is said to be 700,000 euros. For her move from CFO to top management, she also received a severance payment of a whopping 1.6 million euros.
Glatz-Kremsner recently stated that the supervisory board had sustainably secured the future of Casinos Austria with ReFIT. It will continue to be possible to offer high-quality games of chance. The package was developed in record time almost exclusively based on internal know-how. In a speech, she thanked the supervisory board for their professional and committed cooperation.
Lots of layoffs in the casino industry
There are currently a number of job losses in casinos, not only in Austria, but also on a global level. In Great Britain, among other things, Genting announcedigt that it would lay off over 1,600 employees. In the gambling delta of Macau, around 5,500 jobs are to be cut. But there are mass layoffs, especially in the USA; there are several thousand, for example at Cosmopolitan, PNG and Boyd Gaming.
The sad record at this point is held by MGM Resorts International, the company wants to cut 18,000 jobs, most of them in Las Vegas. According to their own statements, the hotels are currently only 43 percent full, i.e. Less than half compared to the previous year. Recently, the economic disaster was also evident in the ridiculous prices: rooms in the MGM Grand were recently available for less than $50 per night.
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