The announcement that MGM Mirage Chief Executive Terry Lanni earned US$9.6 million in compensation last year (US$2 million salary and over US$6 million incentive-based compensation) plus US$12.6 million in stock options has not come at a good time for the more than 400 middle managers that have been told that they have lost their jobs. The company hopes the measure will save it US$75 million a year and ascribes the move to an economic downturn that is not going to improve anytime soon.
The bulk of the cutbacks are in Las Vegas, a city that is already feeling the effects of the current slowdown. According to MGM Mirage guests are spending less and staying fewer days at the casino hotel resorts. Show attendance is down and people are tending to seek 4-star accommodation whereas before they would book at 5-star properties. There are some cuts in middle management in Michigan and Mississippi.
The US gaming scene is suffering from the economic downturn, with little available finance for casino projects or deals. Gaming revenues in general are falling – Atlantic City reported a 9.9% drop in March. At Borgata, an MGM Mirage casino, win was down 13.4% on March 2007 figures. However, MGM Mirage is confident that its costs cutting programme should not entail further job losses – unless the economic situation worsens further. (E-04.16.08)
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