Aristocrat Cuts Many Worker Salaries, Trims Workforce
Posted on: April 28, 2020, 06:39h.
Last updated on: April 28, 2020, 10:27h.
Slot machine provider Aristocrat Leisure is laying off or cutting out over 1,000 employees due to the financial impact from the coronavirus pandemic, according to a company announcement this week. To further reduce expenses, the company will not pay a dividend to shareholders during the current fiscal year and will reduce many salaries.
Some 1,000 company staff members will be laid off until the end of June. Most are in land-based sales, service, or manufacturing. In total, the company has about 4,000 workers.
Also, some 200 positions at Aristocrat will be eliminated. Approximately 200 full-time positions will become part-time for at least several months.
In addition, employee base salaries will be reduced 10 to 20 percent for 1,500 staff members. Board of Directors’ fees will be reduced by 20 percent.
Also, Aristocrat CEO Trevor Croker’s base salary will be cut by 30 percent. He is also chairman of the American Gaming Association.
Close to all of the company’s land-based customers suspended operations in mid-March by the pandemic. Operations at client businesses will likely resume using a phased-in approach. But it is unclear specifically when the businesses will resume operations.
Land-based operations provide much of Aristocrat’s Group revenues. They were credited for about 60 percent of Group revenue for the financial year, which ended on Sept. 30, 2019.
As of the end of last September, Aristocrat received 40 percent of total Group revenue from the digital business. Overall, Aristocrat has over $1 billion in liquidity.
“We are very sensitive to the impact of necessary cost reduction measures on our people, and will work hard to support them through this difficult time, consistent with our people-first approach,” Croker said in a company statement. “We believe that these changes will help maximize opportunities for Aristocrat’s dedicated and talented people over the longer term.”
Financial Reductions Will Provide Efficiency during Uncertainty
“We will continue to do everything we can to restore momentum in our land-based business as quickly as possible, recognizing the importance of continuing to develop and deliver game content during this period,” Croker added. “These changes, and other prudent steps we are taking as part of our COVID-19 response, will deliver important operational and financial flexibility, focus and efficiency through this period of uncertainty.”
Additional company updates will be released when the Group’s half-year results are released on May 21.
Inside Asian Gaming reported the cost reductions will not impact much of Aristocrat’s Asian operations. Workers in Asia will be kept on, the report adds as gaming escalates in the region.
Aristocrat will likely achieve US$65 million through Sept. 30 by the cost-saving measures. The US market has become increasingly important to the company.
In fact, during 2018, Australia-based Aristocrat Leisure opened a North American headquarters in Summerlin, Nevada.
Job Cuts Seen in 2008
These are not the first reductions for the company. Back in 2008, Aristocrat initiated widespread job cuts. In 2009, Aristocrat reported a net loss of $157.8 million.
That was followed by several acquisitions. In subsequent years, the company recovered and saw explosive growth.
In 2014, the company acquired Video Gaming Technologies (VGT) for $1.3 billion. And in 2017, it purchased Plarium for $500 million and Big Fish Games for $990 million.
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