Casino operator Wynn Resorts Ltd. said Tuesday that it will cut pay for its salaried workers, reduce hours for hourly employees and eliminate retirement account contributions and bonuses for 2009 to save $75 million to $100 million annually at its two Las Vegas hotels.
"The purpose of these changes is simple: To protect the margins for our shareholders and our bondholders and our banks; to protect the job security of our employees," chief executive Steve Wynn.
The changes affect the 9,500 full-time employees of the Wynn Las Vegas and Encore casino-resorts on the Las Vegas Strip, who were being told of the changes Tuesday and Wednesday, Wynn said.
Wynn said the moves were similar to cost-saving strategies other casino companies began using late last year to deal with fewer gamblers spending less money in Sin City.
"We were unable to do so because of the unusual situation we found ourselves in opening Encore, and that continued through Jan. 31," Wynn said. "Those changes are being made now."
Several projects in Las Vegas have been canceled or delayed because of the credit markets and pressures on consumers, and Las Vegas Sands Corp., and MGM Mirage Inc. have already announced efforts to save hundreds of millions of dollars yearly. Harrah's Entertainment Inc., the world's largest gambling company by revenue, has been restructuring its debt and in November withdrew a proposal to manage a state-owned casino in Kansas with partners.
The Las Vegas-based Wynn Resorts opened the 2,034-room, $2.3 billion Encore in December, days after dropping room prices to draw visitors to the Encore and Wynn hotels.
The company said its balance sheet remained strong, with more than $1 billion cash on hand. Matt Maddox, chief financial officer, said the cuts would reduce expenses and not directly hurt the company's ability to take in revenue at the two resorts.
Wynn said the changes would force the casinos to operate more efficiently than in the past.
"We're going to learn a lot," Wynn said. "People are going to find out they can run their businesses more efficiently than they ever thought they could before, and that's probably a healthy thing."
"That's probably the only silver lining to this otherwise nasty environment the world finds itself in," he said.
Shares in Wynn Resorts fell 91 cents, or 3 percent, on Tuesday to $28.82. The company's announcement came after the markets closed.
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