Coronavirus: Sky City announces more job losses to come

Monday, 11 May 2020

SkyCity chief executive Graeme Stephens reflects on the blaze and tells how the building evacuation left the precinct a ghost town.

SkyCity says about 700 more jobs are likely to disappear due to Covid-19, after axing 200 last month.

The entertainment group's chief executive Graeme Stephens said it expected to reduce the workforce by about 700 and would start consultation on the proposal, ' to ensure our business is prepared to operate in the new environment'.

“For a company that is centred around its people, this is incredibly difficult for all involved. At SkyCity we are a family and it is incredibly tough to say goodbye to valued team members, however, we need to ensure our business is best prepared to operate in the new environment.

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'These difficult actions will help to create a business that is sustainable in the medium and long term and one which can continue to support the thousands of jobs that will still remain

“We will be working with those potentially affected, their managers and the unions and expect the process to take some weeks,” Stephens said.

The redundancies would be a result of a weaker economy, lower disposable income, changed entertainment habits, restrictions on mass gatherings, physical distancing requirements and ongoing travel restrictions.

The company would reopen as a 'smaller, domestically focused business'.

Unite Union organiser for SkyCity, Joe Carolan said the first round of redundancies had been managed badly. The union was entering mediation on nine cases, and was prepared to go to court if necessary, he said.

'This time around I think that has helped focus their minds and there is more consultation with the unions around the redundancies and the alternatives to mass redundancies,' he said.

The union had negotiated a redundancy clause with SkyCity called 'four by two', which would see people getting four weeks pay for the first year of service, and two weeks pay for every subsequent year.

Delegates had given the union a 'clear steer' to look at alternatives to job losses, including voluntary redundancies, working reduced hours, varying contracts to help workers move back to full time hours when possible, or workers moving to part-time hours, he said.

It was not known where the 700 job losses would come from in the business but the union would 'fight for each one'.

Part of that would be looking at people on large salaries 'sharing in the pain and sacrifice', he said.

The lockdown had highlighted which workers in the economy were essential, including cleaners.

'We've got a chief executive that's earning $2,000 or $3,000 an hour and a cleaner who is earning $18 an hour … I don't think workers in New Zealand will be accepting that anymore,' Carolan said.

Now that the casinos would not be public access areas, and only open to members, there could be a need for more dealers at tables to ensure social distancing is carried out effectively and possible more security staff to monitor numbers in different areas of the casinos.

'In SkyCity the [contact] tracing will have to be excellent,' Carolan said.

SkyCity chief exectutive Graeme Stephens says the job cuts will help to create a sustainable business.

In early April SkyCity announced it would let 200 staff go because of the closure of its businesses across New Zealand and Australia in the Covid-19 lockdown.

At the time Stephens said the Covid-19 crisis has caused an 'unprecedented impact on people, businesses and the global economy'.

'During the closure, we face almost $90 million in lost revenue per month whilst still incurring significant costs such as utilities, lease payments and labour, with labour costs alone around $20 million per month,' Stephens said in an announcement to the NZX.

SkyCity employs about 5000 people.

The entertainment group closed its Auckland, Hamilton and Queenstown sites, which were deemed non-essential services.

In April the board of directors volunteered to cut its fees for the remainder of the financial year by 50 per cent.

The entertainment group also asked waged staff to cut 80 per cent of normal wages to help the business survive.

Those that did not want to accept the wage cut were offered voluntary redundancy.

Stephens said in April that were it not for the wage subsidy the company would be forced to make a further 700 people redundant to 'right-size' its labour force.

According to the Ministry of Social Development's wage subsidy database, the company received nearly $22 million.