Millions of people across the United States are out of work due to the coronavirus outbreak. Once the virus began spreading across the United States, non-essential businesses began to shutdown in order to slow the spread of the virus. Included in this category of businesses is the gambling industry. Casinos were found to be hot spots where the virus could spread due to high touch points like the ATMs, slot machines and poker cards and chips used by players. Companies that operate casinos are now having to furlough employees due to the extended shut down. Boyd Gaming Corp. is the latest to announce major layoffs.
Thousands of Employees Furloughed
Boyd Gaming Corp. announced this week that starting on Saturday, most of their 25,000 workers will be furloughed without pay. With the shut down almost a month long already, the company is struggling due to the non-operation of all their gaming venues. The company is based in Las Vegas and operates 29 properties in 10 different states. When the shutdown began, Boyd stated they would pay their employees, both full and part time, through the 10th of April, which is this Friday.
Boyd is now saying they might need to take additional steps to control the financial impact caused by the pandemic. Speaking about this latest decision, Boyd CEO Keith Smith stated that this is the toughest decision the company has had to make. They care about their team members which is why they maintained benefits and pay through the 10th of April. The furloughs were the last resort but necessary to protect the company especially considering there is no time frame set for reopening.
The executives of the company will also be taking salary reductions at this time and the board has agreed to stop director compensation at this time. Non-furloughed employees who are property management members as well as corporate will be taking a salary cut as well.
Insurance premiums will be paid for the employees who are furloughed and are part of the health care plans provided by Boyd. Payments will be made through June 30th or when they return to work, if that is sooner. Only a limited number of people will remain working for Boyd at this time, those who are considered essential, and they will stay on the payroll.
On March 16th, Boyd Gaming borrowed $660 million of their remaining credit facility to cover the costs incurred during the closures. It has been estimated that the company is spending around $3.2 million a day to cover costs. They will not run out of money until around the nine month mark.
Boyd Gaming was actually one of the first casinos to shut down due to the coronavirus when their Valley Forge Casino in Pennsylvania was closed. The venue is located in a region that was hard hit early by the virus. Just two days later, the company’s Par-A-Dice Casino in the state of Illinois closed.
From there, a slew of closings took place across the nation as more and more states began to take action against the spread of the deadly virus. Boyd has been working on cost-containment measures which include a postponement of any non-essential spending as well as stopping all capital projects.
With the changes, the company is secure knowing that they will have enough liquidity and resources to sustain until the casinos can open back up for business.