Major Overhaul Including Job Cuts Indicated By Crown Resorts
Australian casino operator Crown Resorts is expected to announce extensive jobs cuts in coming months after an in-depth business review by the new executive chairman John Alexander is concluded.
Crown Resorts owner James Packer has said earlier that he has given Alexander a free rein to reduce costs across the company. Alexander has reportedly spent much of the last month discussing with Packer future plans for the group. It is widely being speculated that hundreds of jobs will be eliminated from the company’s flagship properties located in Perth and Melbourne as well as its head office.
Alexander was given the additional role of CEO last month after Rowen Craigie the current chief executive stepped down. Craigie who first joined the group in 1993 played a major part in growing Crown Resorts group in Australia and abroad. With the latest announcement, Alexander's position now will encompass three roles in Crown Resorts – chairman, executive deputy chairman and finally chief executive.
Alexander was first named as the chairman of Crown Resorts in January as a part of a top management reshuffle which saw incumbent Robert Rankin leave the position.Under the reorganization Packer is expected to return to the Crown board once he is cleared by NSW authorities. Alexander is also likely to reassess existing sponsorships deals with racing and sports leagues in his review.
The management rejig was part of a major shift in strategy which included withdrawal from the group’s international projects. The changes were in part triggered by the arrests of 18 Crown employees by Chinese authorities which impacted VIP revenues sharply. The company is still battling the fallout of the arrests.
The latest half year results from the group show that Crown’s VIP revenue fell by 45.3 percent in the aftermath of the arrests, causing the overall profit to drop by 9.1 percent. The new chairman has however said that the company was not retreating from the Chinese market.
In a statement Alexander said,
Frankly, we look at that as a pause rather than a retreat. We are waiting for clarity on China and the details behind that, but no intention to retreat from where we stand in the market.
Rival Star Entertainment Group reported last week that its VIP revenue in last two months of 2016 fell by 27 percent. Chief executive Matt Bekier said the Crown arrests had increased caution and it would be proceeding with care on marketing to high-rollers from China.