The US-based hospitality giant, MGM Resorts, is cutting down its 18,000 headcounts, which is more than one-quarter of its pre-pandemic US workforce due to some of the slow-moving recovery rates casino markets.
On 28th August 2020, MGM said that the layoffs are mainly occurring in Las Vegas, but eventually, it will happen nationwide. MGM is the biggest operator of casinos on the Las Vegas Strip. Since early July, it has been striving to fill its rooms, and casinos from Nevada started reopening. Two of the famous casinos' companies, Las Vegas-based Park MGM and New York-based Empire City, remain closed.
The MGM layoffs have accounted to around a quarter of its US staff of nearly 70,000, caps a wave of buyouts, and job cuts this week around a wide array of industries.
Economists have also warned that a significant number of layoffs will continue, and any recovery has possibly hesitated longer the virus temper. Congress does not form with additional financial aid for the jobless, as well as desperate local governments and state government.
Oxford Economics' lead economist Nancy Vanden Houten said that they think the recovery in the job market will move-slowly. Eventually, the recovery in the job and economy in the market will depend on a medical solution to the coronavirus. In the short run, they think the absence of further federal support constitutes a severe downside risk to the outlook.
MGM fired 62,000 of its 70,000 headcounts when Nevada-based casinos were forced to shut down on 17th March. In early June, many of the casinos were reopened but with the condition of mandatory capacity controls.
MGM has its franchises in Massachusetts, Mississippi, New York, Michigan, and overseas in Macao, has asked to rejoin their workers. However, they limited the staff capacity to 50%, stating fewer workers are required. Two properties, one in Las Vegas and other in New York, are still closed.
MGM stated that the federal law needs the firms to send staff layoff notices to their employees that all the staff has been fired for 6 months. On 28th August, MGM has launched a notice, which reads- it would rehire its workforces when it can.
Economists are not sure about how many American jobs are permanently lost. Early on 28th August, American beverages company, Coca-Cola said that it gave buyouts to 4,000 employees forward of pending layoffs. Half of Coca-Cola's sales come from movie theatres, stadiums, and several other venues where people gather in larger numbers, which have been forced shut during the coronavirus outbreak. In the more recent quarter, the revenue has fallen by nearly 28% in the Atlanta company.
The American and United airlines have also shut down due to a drop in air travel. The airline agencies also stated that they would cut thousands of jobs if Washington does not offer additional financial aid. Tech company Salesforce also declared that it would cut down 1,000 jobs in the present week, whereas Bed Bath & Beyond would reduce 2,800 positions.
These figures represent only a fraction of the unemployment troubling the US economy. From March-end, many of the firms have claimed unemployment benefits that have surpassed one million in each week but one.
On 27th August 2020, the Labor Department has reported another million Americans registered for unemployment benefits. Over 14.5 million are collecting the traditional jobless benefits - in 2019; it saw a further rise of 1.7 million - with no end in sight.
Numerous firms have cut down 22+ million jobs in March and April as the coronavirus pandemic escorted normal business to a sequel halt. In May, June, and July, as the economies slowly reopened, the accounted economy generated was more than 9 million jobs. However, this is a significant shortfall in jobs. The constant drop in unemployment might already have started to develop in several vital parts of the economy.
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