Staff & Wire Reports |
As many as 11,000 workers in Macau will lose their jobs after a cash crunch forced struggling casino operator Las Vegas Sands Corp. to halt construction on multibillion dollar projects in the Chinese gambling city, company officials said Thursday.
Ron Reese, a Sands spokesman in Las Vegas, said the workers were largely employed by contractors and subcontractors. About 2,000 are from Macau, the rest from Hong Kong, mainland China and other countries, said Stephen Weaver, Sands' president for Asia.
Sands will give preference to Macau workers and pay them as it assesses whether they can be relocated to other Sands' projects, though they likely will lose their jobs, Weaver said.
"Regrettably there will be people from Macau in the construction areas that we cannot continue to employ," Weaver told reporters at the company's Venetian resort in Macau.
Macau has overtaken the Las Vegas Strip as the world's biggest gambling center, and American companies have been investing heavily in the former Portuguese colony on China's southern coast.
On Monday, Sands said it was suspending several projects in Macau, mainland China and Las Vegas and part of a project in Bethlehem, Pa. And it said it had agreements to raise $2.14 billion in new capital, including new funding from its billionaire chief executive, Sheldon Adelson.
To be suspended in Macau are a Shangri-La/Traders hotel tower, a Sheraton hotel tower and three casinos at two sites on the Cotai Strip. Another project in early stages on Hengqin Island nearby has been indefinitely suspended, the company said.
The announcement came amid worse-than-expected results for the third quarter and after Sands said last week that it was in danger of breaching lending conditions Dec. 31 and defaulting on $5.2 billion in credit facilities secured by its Las Vegas operations.
In a filing with the U.S. Securities and Exchange Commission Monday, Sands said its board has formed a committee to evaluate the company's decision-making and resolve disputes between Adelson and other senior managers.
The committee has the power to resolve disagreements among management -- even between board meetings -- and was created to address "a loss of confidence" by managers in how the company is being run, according to the filing.
Sands said Adelson and other senior managers -- including chief operating officer William Weidner, executive vice president Bradley Stone and senior vice president Robert Goldstein -- suggested the committee.
"It is only prudent to have the board work in closer consultation with senior management," Reese said, declining to comment further.
The company said it was suspending construction on the hotel, retail and event center portions of its $600 million project in Pennsylvania but will continue building the casino, its parking garage and some restaurants. Construction was continuing with some 800 workers on site; the suspended portions of the project were to come in later phases, Reese said.
Sands said work continues on its $5 billion project in Singapore.
The drop in gambling revenue in Las Vegas put the company in a bind by making it more difficult for the company to meet its obligations by the end of the year on the financing for its massive developments.
The Macau sites, which have cost $1.16 billion so far, are part of the company's $13 billion master plan in Cotai. Sands is trying to arrange between $1.5 billion and $2 billion in financing to continue building in Macau, but Weaver said it's not clear how long that will take or when construction might resume, though he's confident it will.
"We've got $1.2 billion sunk in to the ground, we're not going to walk away from it," he said. "I think there's no possibility that it's never going to start again."
Weaver wouldn't rule out further layoffs in Macau.
"We can't promise that there won't be people that ultimately are laid off,'' he said. ``But at this point no decision has been made."Related Articles:
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