A number of Caesars Entertainment Corp. employees have started leaving the company through a voluntary severance program.
According to a November filing with the Securities and Exchange Commission, Caesars initiated its voluntary severance program Oct. 10, offering it to non-property, U.S.-based corporate employees in management roles.
During a call to investors in early November, Caesars CEO Anthony Rodio said the departures will allow the company to eliminate costs ahead of closing its $17.3 billion deal with Eldorado Resorts next year.
The Reno-based company’s acquisition of Caesars would form the nation’s largest regional casino company, which would operate under the Caesars name. The deal, announced in June, is still subject to regulatory approvals.
$75M to $100M reduction sought
Caesars executives have said the company aims to reduce costs by $75 million to $100 million by the time the transaction closes.
This isn’t the company’s first cost-cutting measure this year aimed at corporate jobs. In March, Caesars announced a round of cuts at its Las Vegas headquarters, with a goal of reducing corporate expenses by more than $40 million annually.
Caesars’ cost reductions could give Eldorado a head start on its financial goals for the combined company, according to SunTrust Robinson Humphrey analyst Barry Jonas. The Reno-based company has set a target of $500 million for synergies in the year following the deal’s closing.
“As we’re getting closer to the deal closing, Eldorado’s been increasingly confident in their ability to hit and exceed the $500 million target,” Jonas said.
Caesars spokesman Richard Broome told the Las Vegas Review-Journal on Tuesday the latest severance program is open to “certain corporate employees,” with the departures taking place between Nov. 1 and Dec. 31.
3K corporate positions
As of March, Caesars employed about 3,000 people in corporate positions around the U.S. Broome did not say how many employees are opting in to the latest severance program.
One of the employees who took part in the program was executive vice president and chief information officer Les Ottolenghi, according to SEC filings. His departure was effective Nov. 15, and he will get 18 months’ worth of base salary and health care coverage, among other benefits.
“We were able to allow them to take the benefits that they would have gotten if they had stayed through closing,” Rodio told investors this month. “I think it was a win-win for everybody.”
Caesars expects to record severance and stock compensation charges of up to $20 million during the fourth quarter from the program.