MGM Resorts International recently undertook two major operations, both internally and externally. On the outside, the casino operator began a shopping spree with a multibillion-dollar wallet. Internally, it underwent a process of massive cut of employee positions. Both of these should, according to the MGM management, impress the Japanese officials.
Brian Sandoval, the president of global gaming development in MGM and the former Nevada governor, stated this recently. He asserts further that the workforce reductions will show to the Janapese lawmakers as well as regulators that MGM is both adaptable and flexible. These traits should help the company in the process of bidding for one of the first three integrated resort licenses in Japan. The plan is a part of the wider MGM 2020 initiative. Jim Murren, the company’s CEO created it as a way to cut costs and drop the debt of the operator.
It includes the need to cut about 2,000 jobs while some of the same positions will be automatized. In other words, robots in one shape or form will take over the job duties form some of the laid off staff. If successful, the plan should leave MGM with an additional $200 million by the end of 2021. Sandoval underlined that the desire is to make the casino operator into a stronger and more flexible company. All of this should benefit their work in the Japanese licensing process. Yet, he also added that he believes that the Japanese officials are not fully aware of the MGM 20202 plan.
At the same time, some experts point out that the plan could have negative implications. While the transparency and the willingness to change are a benefit, job layoffs could be a problem. Japan has a long tradition of trying hard to protect jobs and keep employees in them.
Even in times of hardship, companies are more willing to cut down paychecks and other benefits than to simply let their workers go. Other analysts point to the pragmatic in-company disruptions. This is mainly seen in the issue of laying off 1,000 employees and stating services will not be impacted. It is sure that the Japanese regulators will have additional questions in that domain.
This, in turn, once again brings the issue back to transparency and whether or not MGM is honestly sharing their business predicament. Ultimately, any lack of insight or masking of the truth will be a deal breaker in the eyes of the regulators.
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