MGM Just Laid Off 18,000 Workers - And It's a Rhode Islander Who's Calling the Shots

MGM Just Laid Off 18,000 Workers - And It's a Rhode Islander Who's Calling the Shots

On Friday, MGM Resort International announced that the company is laying off 18,000 workers.

The person directing the shots? MGM chairman Paul Salem, one of the founders of Providence Equity -- and one of the owners of the PawSox.

In New England, MGM operates the Springfield, Massachusetts casino.

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“The job cuts, which start Monday, represent about one-fourth of the company’s pre-pandemic workforce of 68,000 U.S. employees. After casino shutdowns and furloughs in March, the continuing spread of coronavirus in the U.S. has prevented the rebound of many industries, including hospitality, airlines and oil extraction,” reports the Wall Street Journal.

In a letter to workers Friday, MGM Chief Executive Officer, Bill Hornbuckle said the company is required by federal law to send layoff notices to furloughed workers who haven’t been recalled after six months -- and he says MGM still plans to rehire some of the workers as business demand returns.

“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.”

"On the Las Vegas Strip, where casinos rely on vacationers and convention attendees from around the world, gambling revenue was down 39% in July from the previous year, bringing in about $330 million compared with nearly $543 million a year earlier," reports WSJ.

MGM is just one of the numerous casinos being hammered by the pandemic. Rhode Island Lottery numbers show that net terminal income for video lottery terminals ran at about 60% for the fiscal year ending in June 2020 versus the prior year, according to lottery data.

Twin River announced this week that is was laying off 1,300 workers in Rhode Island.

Salem’s position as chair of the board only began in March of this year as the coronavirus was shutting down businesses across the country.

 

Salem's Bio:

• Senior Managing Director Emeritus, Providence Equity Partners (“Providence”) since 2018, with Providence from 1992 – 2018, which specializes in investing in the media, communications, education and information industries by employing a variety of financing structures and target equity investments and bringing industry, financial, operational and leadership expertise to portfolio companies.
• Previously served as a director of Grupo TorreSur, Asurion, Eircom, Madison River Telecom, MetroNet (formerly AT&T Canada), PanAmSat, Tele1 Europe, Verio, Wired Magazine, Education Management Corporation and several other Providence investments.
• Prior to joining Providence in 1992, worked for Morgan Stanley in corporate finance and mergers and acquisitions and prior to Morgan Stanley spent four years with Prudential Investment Corporation.
• Chairman of Year Up, a national non-profit focused on closing the opportunity divide for urban young adults, and a board member of Edesia Global Nutrition, a non-profit dedicated to treating and preventing malnutrition in the world’s most vulnerable populations.
• Serves on the advisory board of the Carney Institute for Brain Science at Brown University.