The Supervisory board of Casinos Austria has approved a restructuring plan proposed by the business management team. The far-reaching plan would help the board reducing costs by €40mn. However, this would also ensure that the headcount of employees is significantly reduced.
The restructuring plan has been termed as the largest reorganization in the history for the board by Bettina Glatz-Kremsner, Chief Executive of Casinos Austria, and has been named as the ReFIT plan. He also asserted that it would ensure that Casinos Austria becomes the number one gaming provider in the country in the long term.
As per the ReFIT plan, all the 12 casino locations can be maintained and can become profit-generating by securing as many jobs as possible. An efficient business through restructuring has been aimed at reducing material and personnel cost up to €40mn. Average salary reduction and job cuts are included in the plan.
Local reports have suggested job cuts up to 500 employees expected due to the plan, even though the casino has not officially declared anything. The strategic reorientation would provide greater autonomy to the properties and lean and independent structures can be formed.
Glatz-Kremsner explained the COVID19 pandemic has already done huge damage. The casinos were closed since March 16 and only opened on May 29. She insisted that the management had to act quickly to respond to the crisis as the difficulties of the pandemic are going to live with the industry in the near future. However, she clarified that the need for action was pending even before the pandemic surfaced. The smoking ban and other factors such as the condition of the casinos and headquarter were responsible for a clear action plan.
Austria banned smoking in public places in November last year.
The majority stakeholder of Casinos Austria, Sazka Group has supported the decision. The Sazka Group manages 55.8% of the stakes of the company and jointly manages the business with Österreichische Beteiligungs (OBAG) through an agreement.
Sazka Chief Executive Robert Chvatal said that restructuring is required to cover future losses. He further said that it is about rescuing a company in the changing world. He ruled out the politics behind this motive. He further said that the motive is to make the casinos fit for-profit and not sell them and thus support the recommendation put forward. He also termed this decision based on facts, figures, and judgments and claimed that it would save 1200 jobs across the business.
OBAG board member, Thomas Schmid said that the company has focused on as many jobs possible and keeping all the 12 casinos operational. He said that the management has assured that by the reorientation plan, the company can be successful and there is no other way. He said that Casinos Austria is a major player in the portfolio of OBAG and assured that the company contributes to Austria as a business location. Schmid confirmed that long term value of investment and player protections are central aspects of the corporate strategy of Casinos Austria.
The ReFIT plan is now being implemented and internal projects and working groups would be formed to fulfill this. It is understood that discussions have also started with employee representatives on the job losses. Schmid confirmed that it is important to implement this with socially accepted manners and with the involvement of the work council.
Glatz-Kremsner has also accepted that the next few weeks could be very difficult and challenging for the company. However, she said if the plan is implemented then the company would be in a much stronger position. She also confirmed that the jobs associated would also be secured in the future once the plan is implemented. Praising the employees, she said that they have done a wonderful job and they have always proved to act for the good of the company, she concluded.