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Tough times force casino to slash jobs

By Brian Hallenbeck

Publication: The Day

Published September 15. 2010 4:00AM   Updated September 15. 2010 5:48PM
Tim Cook/The Day
Muoi "Jodi" Tang, owner of 783 Restaurant and Bar in Norwich, cooks an order for diners Tuesday. Tang has to do the cooking while her chef takes a break because she is currently unable to hire more help. "We are just barely surviving," Tang says. She now worries how layoffs at the Mohegan Sun will affect her business.

Mohegan - Battered by recession for more than two years, Mohegan Sun had managed to avoid mass layoffs, relying on attrition to pare a work force that once numbered nearly 10,000 full-time employees.

Finally, it wasn't enough.

The casino announced Tuesday it was eliminating 475 positions, putting 355 employees out of work, most of them in the food-and-beverage department. It said it will close one of its two buffet restaurants, the snack bar in its race book and two casino-owned food court outlets that will reopen under new ownership.

"We've worked hard the last two years to reduce our labor expenses while waiting for the economy to improve," Mitchell Etess, chief executive officer of the Mohegan Tribal Gaming Authority, told reporters. "But the economy has not improved, the economy has not stabilized."

With the slower-than-expected recovery promising no imminent relief and the authority looking to refinance a debt load of more than $1.6 billion, casino management had to act.

"We were not 'attritioning' fast enough," Etess said.

Profits plunge

In July, the authority reported that its profits plunged by more than half in April, May and June compared to the same three months in 2009. Until last month, when Mohegan Sun released its slot-machine revenue for July, the casino had not reported a year-over-year gain in slots "win" since May 2008. August's slots report is due today.

Since the fall of 2008, Mohegan Sun has eliminated about 900 positions through attrition. Prior to the layoffs, the casino's work force numbered about 9,000, Etess said. The authority employs another 1,500 workers at Mohegan Sun at Pocono Downs in Wilkes-Barre, Pa., who are not affected by the layoffs.

Foxwoods Resort Casino, Mohegan Sun's neighboring competitor, laid off 700 employees in the fall of 2008, months after opening MGM Grand at Foxwoods. It has laid off more workers on a couple of occasions since then, though nowhere near as many. The Mashantucket Pequot Tribe, which owns Foxwoods and has been seeking to restructure more than $2 billion in debt, has announced it will stop making monthly "incentive" payments to tribal members by the end of the year.

Etess, who was joined by Jeffrey Hartmann, the authority's chief operating officer; Bruce "Two Dogs" Bozsum, vice chairman of the Mohegan Tribal Council; and Chuck Bunnell, the tribe's chief of staff, met with reporters Tuesday afternoon in the casino's executive offices. Etess said Mohegan Sun's "labor reduction program" had been initiated the previous day and that management hoped to inform all those affected by the end of Tuesday's shifts.

Bozsum said the layoffs would not affect tribal government, which employs about 400 people, and that no decisions have yet been made regarding future distributions of casino profits to Mohegan Tribe members.

Etess said the layoffs would not affect the level of service the casino provides its guests.

While 475 positions were being eliminated, 120 of those affected will be employed in other positions at the casino, some almost immediately and some following a furlough period. In addition, Etess said, the new owner of the food court outlets - Geno's Fast Break, whose backers include Geno Auriemma, the UConn women's basketball coach - will be hiring employees on its own. On Oct. 1, Geno's Bagels, Subs and Sweets will replace the casino-owned Chief's Bagels, Subs and Sweets, and Wok-On will replace the existing Woodland Wok. The casino-owned outlets will close Sept. 27, as will the Sunburst Buffet.

The casino's Seasons Buffet will remain open.

Food jobs cut

Etess said 275 of the eliminated positions are in food and beverage, with the remaining 200 scattered across other departments, including slot attendants, slot technicians, shift managers and other supervisors and marketing jobs. Forty-seven of the positions are at the manager level and above, up to vice president. Fifteen are at the director level - akin to a department head - and above.

Etess would not confirm the identity of any laid-off individuals. Among the eliminated positions, according to sources, were director of business development, director of sports and entertainment, director of event and destination services and chief engineer.

The layoffs among line employees, such as slot attendants, were performance-based, Etess said, with those who had accumulated points for poor performance being laid off first. In cases in which that criterion failed to yield enough layoffs within a particular job category, seniority was considered in identifying who to let go, he said.

Etess said some of the layoffs were related to technological advances that have enabled casinos to operate more efficiently. New video surveillance systems on gaming floors, for example, mean fewer employees are needed to supervise table games and slot machines. Executives at Foxwoods Resort Casino, Mohegan Sun's neighboring competitor, cited the same rationale in announcing last month that they were reorganizing Foxwoods' table-games department. Foxwoods phased out 85 management positions in the department and replaced them with 45 new positions at a net loss of 40 jobs.

The Mohegan Sun employees who were laid off were offered severance packages of two weeks' pay for each year of service, with payouts ranging from a minimum of eight weeks' pay to a maximum of 28 weeks' pay. Health coverage will continue for the duration of the severance payments.

Raises for some

The tribal council, which authorized the layoffs, took steps to improve the outlook for the casino's remaining employees, Etess said. Employees who weathered pay cuts ranging from 4 to 10 percent in connection with a 2009 cost-containment program, will get a 3 percent increase in 2011 on top of the 2 percent hike they got this year. They also will be afforded more flexibility in taking holidays off.

In addition, a general store where employees can buy groceries and other staples at discount prices will be expanded and a service station where employees can buy gasoline at prices ranging from 5 to 30 cents a gallon less than the going rate will be put in place, Etess said.

Currently, Mohegan Sun sells gas to casino guests who can use their Player's Club points to make purchases.

b.hallenbeck@theday.com

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