Eldorado Resorts to furlough employees starting Saturday

After Eldorado Resorts said it would pay its full-time employees wages — including tips and tokes — and benefits through Friday, a letter to employees shows the company has made the “difficult decision” to furlough a number of corporate and property employees, effective Saturday.

Remaining corporate and property “leadership team” workers, along with the company’s board of directors, will take pay cuts during this period, according to a Tuesday letter signed by CEO Tom Reeg and other executives.

The letter, obtained by the Review-Journal, comes after Gov. Steve Sisolak extended the state’s mandatory casino shutdown through at least the end of the month.

“The past few weeks have presented extraordinary challenges as we continue to address the significant impact the COVID-19 pandemic has had on our company and the gaming industry as a whole,” the letter reads. “However, with the recently announced extensions of many of these closures, we now need to make difficult decisions to help preserve our liquidity and be prepared for the day when we are able to resume operations.”

Cash burn

An April 2 note from Stifel found Eldorado is burning about $1.2 million each day its properties are shut down or below capacity.

The brokerage and investment banking firm believes the company would have close to $3 billion in liquidity after it closes the $17.3 billion merger with Caesars Entertainment Corp., which would give the company at least nine months to run without casino operations until it ran out of cash.

Analysts say the deal’s closure, which was originally expected in the first half of 2020, will take longer and cost more. The letter said Eldorado will remain focused on finishing the acquisition.

“We are confident our diligence and proactive measures will continue to progress towards the successful combination of two outstanding companies despite the obstacles presented by the recent pandemic,” the letter reads. “Our leadership team is committed to doing whatever it takes to preserve during these challenging times. We will emerge stronger and better together.”

Eldorado spokespeople did not return requests for comment, and the letter didn’t specify how many workers would be furloughed. The company had 15,500 employees as of the end of 2019, according to its latest annual report.

The letter says there will be no interruption of benefits for workers enrolled in the company-sponsored medical, dental and vision plans through June 30, and Eldorado will cover associated contributions for those affected by the furlough. Relief funds are also available at each property to provide direct support to team members in need.

Waiting for its return

One Eldorado employee, who was granted anonymity to protect her ability to return to her job, said she first saw the letter Tuesday.

After a number of furlough announcements from other Nevada gaming companies, she said she wasn’t surprised.

“It stinks … but I applied for unemployment,” she said. “It’s getting hard to stay (with the company), but I understand they’re losing a lot of money.”

While the employee said she had been getting paychecks in the mail during the shutdown, she said they were far less than what she made while working. She usually made roughly $1,200 in a pay period with tips, but her last check was closer to $700 — $100 short of covering rent. She said she was able to work out a deal with her landlord under the circumstances.

“It was pointless to get a check from them,” she said. “But what’s more scary is not knowing who’s going to have a job and who’s not at the end of the day when they open up.”

The letter said that the company will contact employees as soon as it has a better idea on when normal business operations will resume. A second letter to employees obtained by the Review-Journal said the company expects furloughs to be temporary — less than three months — but it is “unable to predict” when it will reopen.

“We look forward to the day when we are able to welcome our team members back,” said the letter, signed by Tracy Mimno, vice president and general manager of Eldorado’s The Row. “Please use this time to take care of yourself, your family and loved ones.”

Contact Bailey Schulz at bschulz@reviewjournal.com or 702-383-0233. Follow @bailey_schulz on Twitter.