The announcement that Mohegan Sun is reducing employment pay and benefits, due to unprecedented market conditions, follows on news that salaries have been slashed at Crown Macau. Across the world casino revenues are being hit hard by the economic downturn and both companies are trying to avoid cutting staff.

Melco Crown Entertainment (MPEL) previously reached agreement with workers for a shorter working week and unpaid leave. It has now obtained consent from government officials in Macau for cutting salaries by up to 8% and reducing numbers of imported staff, some at senior level. It is believed that Lawrence Ho, MPEL co-chairman and CEO, is to take a cut in salary.

The Mohegan Tribal Gaming Authority has announced that from 1 February it will cut pay for all employees, with salary rollbacks of 10% for vice presidents and above, 7.5% for middle managers and 4% for all line and hourly employees. In addition it will eliminate annual raises and merit-based salary increases and is scrapping matching contributions to employee benefit plans. The tribal gaming authority also said that it planned to cut marketing expenses and reduce hours at some outlets and will try to cut costs for supplies and services.

Mitchell Etess, president and CEO of Mohegan Sun, said the economic downturn has had an unprecedented impact on the casino, which opened in 1996. He described the cuts as difficult but necessary and said that in addition to respect for its employees the company also has a responsibility to banking partners, bondholders and stakeholders who continually support its vision.

Lawrence Ho stated, "We have insisted on exploring ways to avoid large-scale redundancies and our primary hope is to keep our employee teams together in the best shape possible. This will help us to best deal with the current turbulence in market conditions, so that when the market revives -- as it most surely will -- MPEL will be best poised to benefit.'' (E-01.12.09)

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