MGM Laying Off Hundreds at Mandalay Bay
As lawsuits spurred by the October 1 mass shooting on the Las Vegas Strip pile up and MGM Resorts International comes under mounting criticism for failing to prevent a lone madman from turning a suite at Mandalay Bay into an arsenal, the company has added to its public relations woes by announcing that it’s laying off workers at the hotel in response to the fall-off in business.
“We have disclosed publicly that occupancy this year at Mandalay Bay will be slightly lower than normal,” said Alan Feldman, the company’s executive vice president of Global Industry Affairs. “We are trying to handle this with the least possible interruption to our employee’s schedules, but in some cases, reduced schedules may not be sufficient. We are striving to impact as few employees as possible.”
Feldman’s second in command, Debra DeShong, said the layoffs will total “several hundred” of the property’s 7,400 employees.
Local news reports said the reductions were greeted with surprise in the wake of statements from MGM Chairman and CEO James Murren that the financial impacts of the tragedy had been limited.
“Cancellations progressively subsided by mid-October and our booking pace remarkably returned to normalized levels almost immediately thereafter, as soon as we turned on our marketing efforts,” he announced on the company’s most recent earnings call. “About half of our cancellations were isolated literally to the month of October. We’ve seen bookings improve, our business improve, here in November.”
Some of that discrepancy can be attributed to seasonal business cycles, the same reports noted. “As you know (staffing adjustments) are made seasonally,” said DeShong.
A representative for Culinary Union Local 226, which represents workers at MGM’s properties and across the Las Vegas resort industry, expressed concern.
“Contracts have seniority language which detail that layoffs must be done in a fair and impartial manner and ensures that when business improves, workers will return to work by seniority,” a spokeswoman said. “The union will be monitoring the situation closely and continue working with affected workers to ensure that the company follows the contract.”
Insurance experts, meanwhile, say the massacre could cost their industry more than $1 billion when all is said and done, with claims from life and health insurance and class-action lawsuits expected to continue for years.
“It doesn’t take long to get to a large number” in claims, said Heidi Lawson, a lawyer at Mintz Levin who specializes in insurance litigation and investigations. “There was a failure to oversee, a failure to supervise, a failure to set up internal security measures.”
MGM said in a recent filing that it expects its insurance to cover liabilities tied to the lawsuits.
The U.S. Treasury Department has a terrorism insurance program to help shield insurers from losses, but President Donald Trump and the Department of Homeland Security have not declared the Las Vegas shooting to be an act of terrorism. The Sept. 11, 2001 attacks, the first to be covered by the program, resulted in $43.6 billion of property, life and liability claims. It was the second-costliest insurance event after Hurricane Katrina, which totaled $49 billion.
Fifty-eight people were killed and around 500 injured when Stephen Paddock, a resident of nearby Mesquite, Nev., and a frequent visitor to Las Vegas, opened fire the evening of October 1 on an outdoor country music festival on the Strip from a suite near the top of Mandalay Bay.
The months ahead will see lawyers for the victims wondering how the hotel could allow Paddock’s room to go unchecked for days while he stockpiled it with 23 guns and how it failed to take note of the unusually large number of bags he brought in.
“Being in a room for three days in a ‘Do Not Disturb’ situation? That would’ve triggered an alarm here,” Wynn Resorts Chairman and CEO Steve Wynn recently told Fox News. “We’d go into the room. We’d want to know more about anybody who was sequestered in a room for more than 12 hours.”
Resorts up and down the Strip and across the city are re-evaluating these and other policies and procedures in the wake of the tragedy.
Boyd Gaming, for one, is now informing guests on check-in that “safety and welfare” checks will be conducted on any room posting a “Do Not Disturb” sign for more than two days in a row, a spokesman said.
Not surprisingly, MGM has declined to comment on its procedures, according to news reports, while other major operators, including Caesars Entertainment, Las Vegas Sands and Station Casinos, likewise have indicated they prefer to keep the wraps on measures they’ve instituted since the shooting to protect their guests and visitors.