Gloomy economy blamed as Foxwoods, MGM Grand lay off 700

Adam Bowles

The Mashantucket Pequots announced Tuesday they are cutting the work force at Foxwoods Resort Casino and MGM Grand by approximately 700 people over the next few weeks.

The tribe described the decision as a response to declining revenue as people gamble less, and a move to protect the long-term economic success for the nearly 11,000 workers at Foxwoods and MGM Grand, a $700 million expansion that opened in May.

“As is happening to so many organizations, the economic issues facing our nation and regional consumer economy have negatively impacted our revenue growth,” Tribal Council Chairman Michael Thomas said in a written statement. “Although it has taken a few months, the recession’s impact can now be clearly seen in our industry.”

The announced layoffs come one week after the Mohegan tribe suspended construction of the remaining $734 million of the Earth Expansion, a project that was expected to create 1,200 permanent jobs and at least as many construction jobs.

It also comes at a time when Wall Street is suffering its worst credit crisis since the Great Depression. The Dow dropped nearly 800 points Monday, the most in a single day, and Congress rejected a $700 billion bailout.

‘Across the board’

The layoffs of 6 percent of Foxwoods’ work force will affect management and staff “across the board,” Mashantucket spokeswoman Lori Potter said.

Anyone who will be laid off will receive notice on or before Oct. 17, and will receive two weeks pay for every full year of service and medical benefits for up to 26 weeks. The workers also will be offered jobs to fill vacancies at the casino, Potter said.

In March, the casino, long concerned about slumping consumer confidence due partly to rising gas prices, competition and rising energy prices, had asked for voluntary layoffs among tribal government employees. Soon after, fewer than 200 workers were laid off.

As he said when the Mohegans announced its one-year project delay, Tony Sheridan, president of the Chamber of Commerce of Eastern Connecticut, called the Mashantuckets’ decision a wise one for their business.

“Obviously, it’s going to be disappointing and a significant hardship on the people who are let go, but I’d like to look on the positive side of things and that is there are 11,000 people over there,” Sheridan said.

John Beauregard, executive director of the Eastern Connecticut Workforce Investment Board, said the number of people laid off from Foxwoods is more than what employment support services normally can handle at once.

He said available jobs in the region range from service positions at Killingly Commons, a retail development in Dayville, to drafting careers at Electric Boat in Groton.

Most in long time

“It’s a large blow because that number ranks among the largest we’ve seen in a good decade anyway,” Beauregard said, referring to layoffs in the defense industry. “There’s only a handful of employers that have that high of an employment count in the region.”

Ibrahim Abdul, 23 and a Norwich resident, said it was depressing to be laid off from his two-year job as a cook at a restaurant in Hartford that folded. But he knew there were job openings at Foxwoods and he landed a job as a cook four months ago. Norwich has a high proportion of casino workers.

“The economy is in shambles right now,” he said while waiting for a ride home at the Foxwoods employee lot on Route 2. “I wouldn’t be surprised if Foxwoods laid people off. I wouldn’t be surprised if the Mohegans laid people off. It’s to be expected. We are near a depression.”

Abdul directed his frustration at Washington, where he said the recently failed bailout would’ve only benefited the rich.

“I blame Bush and the Republicans, not Michael Thomas,” he said.

Less money to state

Slumping revenue at the casinos means less money for the state, which announced Tuesday a second round of cuts — this time of $35 million — as its projected budget deficit has grown to $300 million. About 45 percent of the state’s income tax depends on the financial markets. Twenty-five percent of slot revenue is given to Connecticut.

In May, the Mohegans announced they would trim their work force by approximately 600 people through attrition, a decision made as the casino announced its adjusted income for operations was $86.3 million, a 10.9 percent decrease from the same period last year.

Good August

In August, gamblers put $865 million through 8,259 slot machines at Foxwoods, up $22 million from $843 million in August 2007. At Mohegan Sun, players put $948.2 million through the casino’s 6,143 slot machines — almost $11 million more than the $937.8 million played during the same month last year.

But both casinos saw eight months of declines in slot revenue until May, when they rose two-tenths of a percent at Mohegan Sun and 7.7 percent at Foxwoods, an increase largely attributed to the opening of the MGM Grand.

“I’m sure this was a very difficult decision for (the Mashantuckets) and it’s yet another example of the times that we are in right now,” Mohegan Sun President and Chief Executive Officer Mitchell Etess said.

What’s next: Workers laid off at Foxwoods Resort Casino and MGM Grand at Foxwoods will receive notice on or before Oct. 17, and will receive two weeks pay for every full year of service and medical benefits for up to 26 weeks. The workers also will be offered jobs to fill vacancies at the casino.

By the numbers

700 Approximate number of layoffs in the next few weeks.

9,000 People employed at Foxwoods Resort Casino.

2,000 People employed at MGM Grand at Foxwoods.