The Star [Temporarily] Stands Down Over 8,000 Of Employees
Posted on March 31, 2020 | 11:51 am
Australia’s famous integrated resort company The Star Entertainment Group has decided to lay off 90% of its staff following the complete shutdown of all casinos and other entertainment venues.
Introduced by Prime Minister Scott Morrison in an effort to slow down the spread of coronavirus, the closure came into force on March 23 at noon, requiring immediate reaction from all the involved parties.
Material Impact On Operations
On Wednesday, The Star released a press statement to inform investors on the impact of the Covid-10 related directives issued earlier by the New South Wales and Queensland Governments. Since the previous measures such as social distancing applied by different casinos across the country were not enough, the health authorities recommended the complete closure of all playing houses.
The Group’s operations in Sydney, Gold Coast, and Brisbane were ceased with only hotel accommodation remaining open for quests but in a reduced capacity.
“The shutdown of the casino properties will have a material impact on The Star’s operations. Management is focussed on implementing mitigation strategies to minimize impacts and conserve liquidity. These include materially lowering operating costs and reducing capital expenditure.
As at 24 March 2020, The Star had available cash or undrawn committed debt facilities of $480 million,“ said in the statement.
Laying Off 90% Of Staff
One of the prompt measures taken was „a very difficult, but necessary“ decision with regard to the company’s workforce that numbers approximately 9,000 employees.
At the moment…
…The Star is in the process of „temporarily standing down“ over 90% of the staff or more than 8,100 people, senior management included. To help all affected employees get past the difficult period, they will be provided two weeks of paid pandemic leave and will be able to access „any accrued annual and long service leave entitlements.“
In addition to that, the board and senior management will also go without a noteworthy percentage of their directors’ fees and salaries. Details of those reductions are not made public yet but they will be announced in the coming days following the finalization of “the necessary stand downs across all levels.“
Needless to say, The Star is going to closely monitor the situation with COVID-19 and the way the complete shutdown affects the company’s business. At the moment, however, The Star is not ready to reliably advise of the impacts on financial performance, mainly due to the unknown duration of the current circumstances.
Chairman John O’Neill AO said:
“This is a unique environment and one beyond our control in which we’re determined to balance the necessary measures needed to protect the business while considering the considerable human impact to our workforce.”
Managing Director and Chief Executive Officer Matt Bekier said:
“We have incredible people at The Star and huge potential. We are also confronting, like the rest of society, an unprecedented challenge in the COVID-19 situation.”