Penn National Gaming warns of permanent layoffs

Penn National Gaming warns of permanent layoffs

Wyomissing, Pennsylvania-headquartered Penn National Gaming Incorporated has recently announced the reopening of more than 70 per cent of its casinos following corona virus-induced shutdown, but thousands of its employees will likely not be around long enough to celebrate as the entertainment giant has warned of permanent layoffs.

Thirty of Penn National’s 41 gaming and racing venues resumed operations earlier this week following lengthy shutdown ordered by state authorities as part of the efforts to minimize transmissions of the potentially deadly corona virus. The total number of the company’s reopened facilities got a boost on last Friday when the company’s 4 properties in Ohio and the Hollywood Casino at Penn National Race Course in Pennsylvania reopened their doors to the general public. The entertainment giant is now welcoming guests to its casinos in thirteen of the nineteen states in which it operates.

Soon after the COVID19-induced shutdown, the company furloughed nearly 26,000 employees. While many of them are now happily to return to work, some are facing the axe due to adverse business conditions. It may be noted here that gaming regulators across the nation have imposed strict caps on the number of visitors, putting limits on other aspects of casino operations.

The American operator of casinos and racetracks has warned that nearly 10 per cent of its furloughed employees could be permanently laid off. The painful process of slashing the workforce is expected to begin in August or September this year. The projected slashing of workforce by 10 per cent means nearly 2,600 employees will lose their jobs.

In letters sent to officials in various states where employees could receive layoff notices, Penn National’s Chief Human Resources Officer Gene Clark said, “This layoff will be permanent, but the facility will remain open. It also cites bumping rights for affected union employees. The impact of corona virus pandemic on our business was not reasonably foreseeable until now.”

In May, Penn National CEO Jay Snowden had told analysts that the company would be really thoughtful around how we rebound business and improve its operating model in terms of labor expenditure to help the company operate more efficiently than it did in a pre-pandemic environment.

However, regional casino operators like Penn National would likely benefit the most from a substantial rebound in demand across several states in the US as air travel remains restricted. The prevailing theory is that regional casinos will enjoy greater returns in the short-run than casinos in popular gambling hubs like Las Vegas.