SkyCity suffers from second lockdown
It was not long ago that New Zealand reported to be the first corona-free country in the world. Now, however, four new cases of Covid 19 infection have become known. And the country reacts promptly. The risk level for the metropolis of Auckland has been raised, resulting in another lockdown. This means that the SkyCity Casinos have to close their doors in the metropolis again. The group also announced that the safety precautions should be significantly increased at other locations. The fear that a long lockdown could again cause an unstable economy is great.
SkyCity Casinos: Normal operation only returned in June
Once normal operation and back! The last few weeks have been like a bad movie for SkyCity. The company is again facing a lockdown in Auckland. The casino only went back to normal operation in mid-June, after the first lockdown had to be overcome due to the Corona crisis. The problem: New Zealand was actually the first corona-free country.But now four new Covid-19 cases have become known. Further infections cannot be ruled out, but the virus should be slowed down at an early stage. That is why Prime Minister Jacinda Arden ordered a regional lockdown. This affects all companies that are not considered systemically important. Thus also the gambling companies like the SkyCity Casino. Risk level 3 would therefore apply again in Auckland with immediate effect.
SkyCity announced in this context that nowall casinos and leisure facilities in Auckland will be closed immediately . This condition would initially apply until the end of the week. In addition, the risk levels for Hamilton and Queenstown were also raised, where SkyCity is also active with its own establishments. Here the level has been increased from 1 to 2. The companies are therefore allowed to remain open, but have to implement stricter hygiene and distancing measures again.
Company says it is well prepared
The company in Adelaide, where SkyCity operates the Adelaide Casino, is not affected by the changes in risk levels. But here, too, extensive distancing and hygiene measures already apply. The cut in business operations is likely to be massive, but the group is well prepared. A press release said the company would be fully compliant with the New Zealand government's guidance. In addition, it would be in astrong financial position and could react quickly to counteract the effects of the temporary restrictions. According to the company, the hotels in Auckland may also remain open. The existing guests are to be accommodated and looked after here in a corona-compliant manner.
Critics, however, see SkyCity's statements as more of a hoax than the truth. The reason: SkyCity itself announced in May thatprobably significant job cuts will be necessary. It is said that around 700 employees would have to fear for their jobs. The casino in Auckland, where around 3,000 employees work for SkyCity, is said to be affected by these cuts. SkyCity gave the reasons for the cancellations, among other things, the restrictions on major events, social distancing or the lower disposable income of the guests.
Unions know about plans
SkyCity's decision has been heavily criticized by the union. However, according to the trade union Unite Union, they were aware of the plans and were able to prepare accordingly. Specifically, aspecial termination clause negotiated. Employees who have been with the company for 20 years or more will continue to receive their full wages for up to six months after termination. However, the union also stated that it was not directly involved in the redundancy plans. If the layoffs have been held back quite well so far, the process should be significantly accelerated by a renewed lockdown in Auckland. A hard setback for the company, but of course also for its employees.
And this setback also caused criticism outside of the unions. It became known that SkyCity only received grants equivalent to around 9.4 million US dollars in July. As a wage subsidy for more than 2,200 employees. The group was also supported in the run-up to this payment with around 21.6 million US dollars. The fact that redundancies are said to be necessary despite thesupport of more than 30 million US dollars calls numerous critics into action. For comparison: The industry association American Gaming Association (AGA) is still waiting for a government aid package.
Enormous drop in sales threatens SkyCity
SkyCity justifies itself with amassive drop in sales that the company has had in the last 40 days have to accept. Accordingly, sales have fallen by more than 40 percent, which is why an extension of wage subsidies has been applied for. In this way, the aim was to at least keep the workforce until business can be brought back to the level before the Corona period. For the future, SkyCity also announced that they would like to rely on smaller companies in the future, in order to remain strong and able to act, especially domestically. That shouldn't necessarily be good news for the employees either.