Crown Resorts chief executive Ciaran Carruthers has revealed up to 1000 staff will be made redundant in a major restructure following a lack of customers in its Melbourne, Sydney and Perth casinos due to stricter regulations and the cost-of living-crisis.
Carruthers revealed in an interview with this masthead last week that the cuts were looming, but wrote to staff to confirm the changes on Monday morning, as reported by The Australian Financial Review. Crown employs more than 20,000 people and is one of the biggest employers in the states in which it operates.
The redundancies will reduce the company’s overall headcount by 4 per cent and most of the affected roles will be based in the group’s flagship Melbourne casino precinct.
The cuts were split between its corporate and casino divisions, as well as in the remediation team that was bolstered while the business worked to regain its suitability to operate in Melbourne and Sydney.
There are no Crown Sydney casino employees affected in this latest round of redundancies, with those affected in Sydney all in corporate and hospitality.
“The challenges at Crown reflect greatly reduced foreign tourism, a sharp decline in local workers in the city centres, and restrictions on gaming play in Sydney and Melbourne,” Carruthers said.
“We are committed to our regulatory obligations and ongoing transformation, including Crown PlaySafe, Melbourne and Sydney transformation plans and ongoing remediation in Perth.”
Private equity group Blackstone bought Crown for $8.9 billion in 2022 after Crown was disgraced by two royal commissions into its operations that found extensive anti-money laundering and counterterrorism failings across the business, first raised by an investigation by this masthead and 60 Minutes.
Crown regained suitability to operate its casinos in Melbourne and Sydney this month, and is now charged with ensuring the business is sustainable economically.
The foreign high rollers who formerly propped up the bottom line of casinos in Australia are yet to return, and regulations imposed on the industry have made it less enticing for them to do so.
Crown Resorts will cut 1000 roles in its latest restructure. Credit: Bloomberg
Carruthers told this masthead last week the challenges facing Crown reflect the macroeconomic issues faced by all hospitality businesses, but added that the regulations thrust on casinos should be expanded to the rest of the gambling sector.
“We fully embrace the need for regulatory change. It’s when these regulations are proven to be viable and have been implemented by us and are yet only imposed on us that it is a bit challenging,” Carruthers said last week.
Crown Sydney, which does not have poker machines and was designed to be a high-roller focused casino, made 275 people redundant and closed one of its two gaming floors in August, just one year into its operations. The second gaming floor had been anticipated to reopen this year but Carruthers said this was unlikely to happen until trading picked up.
Crown Melbourne made about 200 people redundant this year. It transitioned its 2600 poker machines to carded play in 2023 at great cost, which resulted in reduced machine revenue at the Southbank precinct. Victoria’s pubs and clubs have not been required to mandate carded play in their venues.
Crown Perth has poker machine exclusivity in the state and is not anywhere near as affected by the macroeconomic issues hitting Sydney and Melbourne. Sources close to the company said about 50 jobs would be affected in Perth out of 1000 employees.
Carruthers said meeting the prescribed remediation time frames set by the NSW and Victorian regulators had required significant investment from Blackstone.
The company has so far spent more than $200 million on its remediation effort across its three casinos.
He said getting the nod from state regulators in Melbourne and Sydney had shown the company had “changed its DNA”.
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