MGM Mirage Forced To Let Employees Go Due To Poor Economy
MGM Mirage is letting go an estimated 400 management employees due to the new cost cutting program. The new program was launched last year by corporate because of the slow economy – which is causing many casinos to lose much of their profits. The Wall Street Journal reported the job cuts to be less than 1% of the total amount of workers that are employed by Mirage. They employ close to 66,000 employees all across the world.
At this time MGM runs 10 casino resorts all of which are located directly on the Las Vegas Strip. This is where they will also be building their new City Center – a mixed-use development. They are branching out beyond Vegas and are working on building casino hotels in Detroit, Mississippi, New Jersey, Atlantic City, and China’s Macau.
Alan Feldman – a spokesman for the company – went on record to say that the program was to help increase sales by efficiently reorganizing the casino and enforcing precise cost control.
Feldman went on to say that, “Although it has taken a few months, the economy’s impact can now clearly be seen in our industry. MGM Mirage’s revenues have softened and our operating margins are down from their usual levels.” The company is hoping to save around $75 million a year due to job cuts and the improvement of many of their business practices.
The Wall Street Journal was not the only one to comment on the lay-offs from Mirage. Celeste Mellet Brown – an analyst from Morgan Stanley lowered the estimated amount for the Mirage’s 2008 earnings this week. This is more proof that Las Vegas is losing its customers and the demand for casinos is waning.
“As MGM continues to lower its room rates to maximize occupancy, we feel additional estimate cuts are appropriate, especially for the mid-to-low end properties without an obvious customer draw,” Celeste Brown said in her research notes. She went on to say that she expects Mirage to earn around $1.83 per share instead of the $2.21 per share that she had originally predicted
Morgan Stanley went on record to say that they would not be releasing a price target on the stock for Mirage ”given the disparity of where we believe the stock should be trading fundamentally versus valuation based on the risk of corporate action.”
Popularity: 27% [?]
This is default description text on Padangan Themes, of course you can change this text via you profile administration.