Australian slot machine giant Aristocrat Leisure Limited has revealed it will temporarily stand down 1,000 staff and cut 200 jobs permanently as it looks to reduce costs as a result of the COVID-19 pandemic.
But there will be no impact felt by Aristocrat’s Asia team, with all local staff retaining their roles and the company promising an increase in content production from the region.
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Providing an update on its COVID-19 response to the ASX on Monday, Aristocrat said it is standing down around 1,000 staff group-wide – equal to a quarter of its global workforce of 4,000 – until the end of June 2020 with the majority being in land-based sales, service and manufacturing operations, “reflecting venue closures and uncertain re-opening timeframes.”
Another 200 roles will be made redundant, while 200 positions will move from full-time to part-time until the end of the financial year on 30 September 2020. In addition, until September the base salaries of around 1,500 staff will be cut by between 10% and 20%, directors will face a 20% cut to their fees and CEO Trevor Croker a 30% cut to his base salary.
However, Inside Asian Gaming has learned that the impact will be minimal in Asia, where all staff will be retained with no impact to any customer-facing roles in sales or technical service nor to its production or supply chains given Aristocrat’s local facility at the Macau integration centre.
The company also revealed to IAG an ongoing commitment to develop more content in and for Asia than previously in order to support the rebound of casinos through 2020 and 2021.
Aristocrat said its extensive global cuts were deemed necessary due to “people costs” comprising around 70% of the company’s operating expenses.
Also on the chopping block is this year’s interim dividend with directors deciding to suspend the dividend policy for the half-year results due to be released in 21 May 2020.
Along with utilizing stimulus measures in Australia, the United States and some other markets where applicable, Aristocrat said it anticipates a cost saving of around AU$100 million (US$65 million) through 30 September 2020.
Nevertheless, the company outlined liquidity in excess of AU$1 billion, comprising cash from operations and AU$150 million already drawn down from the group’s revolving credit facility. Another AU$136 million remains available after Aristocrat upsized that facility last week, it added.
“We are very sensitive to the impact of necessary cost reduction measures on our people, and will work hard to support them through this difficult time consistent with our ‘people first’ approach,” said Croker.
“We believe that these changes will help maximize opportunities for Aristocrat’s dedicated and talented people over the longer term. We will continue to do everything we can to restore momentum in our land-based business as quickly as possible recognizing the importance of continuing to develop and deliver game content during this period.
“These changes, and other prudent steps we are taking as part of our COVID-19 response, will deliver important operational and financial flexibility, focus and efficiency through this period of uncertainty.”
