Wynn Resorts to cut staff hours, bonuses to avoid layoffs - Business

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Feb. 04, 2009
Copyright © Las Vegas Review-Journal

Wynn Resorts to cut staff hours, bonuses to avoid layoffs

By BENJAMIN SPILLMAN
LAS VEGAS REVIEW-JOURNAL

Planned reductions to hours, salaries, bonuses and 401(k) retirement plan contributions by Wynn Resorts Ltd. will affect workers at Wynn Las Vegas, above, and its sister property, Encore.
Photo by Duane Prokop.

Luxury casino operator Steve Wynn on Tuesday announced plans to cut hours, salaries, bonuses and 401(k) contributions for thousands of his Las Vegas employees in an effort to stave off layoffs.

The decision by Wynn Resorts Ltd. affects employees at Wynn Las Vegas and Encore, a $2.25 billion resort that opened just six weeks ago.

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During a conference call, Wynn said the company will reduce spending on everything from energy to floral arrangements if it means preserving existing jobs and insurance benefits.

"Everybody makes a little less money but everybody keeps their jobs," Wynn said.

According to a statement, the company plans to:

• Reduce pay 15 percent for salaried employees making $150,000 or more and 10 percent for those making less effective Feb. 16.

• Reduce workweek to 32 hours for full-time, hourly employees.

• Suspend employer match to 401(k) accounts.

• Eliminate 2009 bonus accruals.

Wynn estimated the cuts, which have been planned for five to six weeks, would save the company $75 million to $100 million annually. He said cuts would apply to 9,500 full-time employees, including top management.

It comes after Wynn spent "a ton" of money to ensure a smooth opening for Encore.

"We carried huge extra staff. We also prepared a rather extravagant and far-reaching preopening advertising campaign," Wynn said.

Although Wynn says he considers the Encore a success, the reduction in the number of people visiting Las Vegas is clearly affecting his company.

Rooms in the new resort have been selling for less than $200 per night, a far cry from the boom of 2006 an 2007 when rooms at Wynn Las Vegas could fetch several hundred dollars per night.

Also, consumers aren't booking rooms until the last minute, which makes it harder for Wynn's managers to make financial projections.

"People with money are showing up at Wynn and Encore, but they are being a little more disciplined with their expenditures," Wynn said. "When there is a loss of consumer confidence like this, people behave in ways that are new to us."

The bargains at Wynn and Encore aren't helping other properties on the Strip.

Guests upgrading to Wynn's properties leave vacancies in second-tier hotels such as MGM Grand, Mandalay Bay or The Mirage.

Those properties must then poach customers from down-market properties such as Excalibur, Imperial Palace, the Rio and others.

That leaves those hotel-casinos scrambling for whatever business is left. It's a phenomenon that has led to some of the most aggressive room-rate wars in memory.

"They want us to get the rates up because right now we are pricing the Strip," Wynn said of his competitors on the Strip. "It is either my staff that is safe or somebody else's. If that's the way it goes, it is going to be my staff that is safe."

The cuts announced Tuesday won't affect workers at Wynn's properties in Macau.

Contact reporter Benjamin Spillman at bspillman@reviewjournal.com or 702-477-3861.

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Please enter your name Name: Please enter your email Email: Please enter a comment COMMENTS : (word count limit is 300) You have reached the maximum number of words allowed Current Word Count: Note: Comments made by reporters and editors of the Las Vegas Review-Journal are presented with a yellow background. Tony T. wrote on February 05, 2009 11:01 PM: Everyone under the impression that nobody at the WYNN or ENCORE has lost their jobs. Wrong! Dozens of Engineers, Security, Retail, Food & beverage and PAD have already been told their services are no longer needed the past week. The casinos in town should do the right thing and pay for the U-Haul so their former employees can atleast get out of town. Right attitude wrote on February 05, 2009 09:15 AM: John, that is the right attitude! John wrote on February 04, 2009 10:53 PM: My other half works at Wynn and is getting a 10 percent pay cut. That $5000.00 a year is going to hurt. But we'll tighten the belt and be grateful that there is still a job! I am just praying this economy is turned around by the time city center opens or this town just might be done for. Lou wrote on February 04, 2009 09:00 PM: I have no respect for Wynn. He dumps his wife at 67? Late-Life Crisis? Whatever. Blind SOB anyway. Steve wrote on February 04, 2009 06:38 PM: I work at the Wynn. I always listen when the boss is interviewed. It's how I learn about my job. A couple of weeks ago Steve Wynn was interviewed by Steve Friess of the 'Las Vegas' podcast and USA Today. Friess asked Wynn if he is in trouble. Wynn denied he was in trouble. However he did say: "....there's been a tidal way of new hotels..........Sheldon, Lanni, Murren forgot the rules. A tidal wave of hotels.......the world is all full of son of bitches that know all there's to know about how to make a deal. It's disgusting what has happened to my town. Everybody I know is in trouble here". Pressed by Friess, if he was in trouble. Wynn said: "....no....but if you ask me if I lose money for two years - I'll be in trouble". Seems it's taken less than two years for the trouble to begin. It's taken two weeks. Does this mean Wynn will go the way of Sheldon Adelson? From billionaire to broke? After hearing the interview I told my wife to rip up the credit cards and no more eating out. Breaking News wrote on February 04, 2009 06:32 PM: People in Las Vegas can turn any article into something to do with teachers, More at 11:00 Mixologist wrote on February 04, 2009 05:49 PM: I agree members of the Culinary Union have to take a pay cut! denro wrote on February 04, 2009 05:46 PM: The internet is so unreliable in that you are not going to necessarily get accurate information by even looking at a "discount" website. Therein lies the vagaries of the internet. hey ken wrote on February 04, 2009 05:38 PM: Do you want to make a wager, Kenny boy? Tell me where to meet you and we'll settle this like men. Dave wrote on February 04, 2009 05:10 PM: That leaves those hotel-casinos scrambling for whatever business is left. It's a phenomenon that has led to some of the most aggressive room-rate wars in memory. Give me a break - these casinos care about no one. Here are rates off a "discount" website just today for the lowest priced rooms for this weekend: Mirage - $249/night Venetian - $249/night Bellagio - $399/night WYNN - $850 for Friday night only Yea, these guys are really hurting! LOL Read All Comments