Wynn Resorts cut wages in Las Vegas
In the wake of the continued US economic catastrophe, Wynn Resorts said Tuesday it would slash wages of their salaried workers in Las Vegas, and cut back work weeks for full-time hourly employees. The collective move was to ensure that no jobs are cut.
"In effect, everybody makes a little bit less money, but everyone keeps their job," said chairman and CEO Steve Wynn said during a conference call with analysts and investors. "We don't want anybody on unemployment here."
On the other side of the Strip, competitors like MGM Mirage, Las Vegas Sands Corp and Harrah's Entertainment see things a little bit differently and have been laying off employees in every effort to keep businesses afloat while casino floors are thin on the ground.
The timing was especially bad for Wynn as he recently opened the $2.3 billion, 2,000-room Wynn twin, Encore, on the Strip. With its doors now open, he said that 2009 bonuses would be axed that the program to match 401-K retirement plan contributions would be shelved for the time being. With these measures in place, Wynn is projected to save $75 million to $100 million annually.
"We spent a ton of money in November, December and January getting [Encore] off the ground," Wynn further commented. "These expenses occurred, of course, at a time when the economy of America, and Las Vegas in particular, was softening."
But to entice people to his new flagship casino and hotel, Wynn dropped room rates, news of which spread like wildfire across the Strip.
"Unfortunately this is a sign of the times in Las Vegas, even high-end properties are not immune," said Matthew Jacob, a Majestic Research analyst.