|By Howard Stutz, Las Vegas
Review-JournalMcClatchy-Tribune Regional News
May 14, 2009--New Las Vegas Sands Corp. President Michael Leven said the company plans to eliminate up to 4,000 jobs in its Macau casinos in an effort to "right-size the operations" in the Chinese gaming enclave.
In an interview with Bloomberg, Leven said the company wants to reduce costs in Macau by September.
Leven, who took over as Las Vegas Sands president on March 11, told the Review-Journal on Tuesday the company had stabilized its efforts at its two Strip casinos and was looking at a similar strategy in Macau.
The company operates the Sands Macau on the Macau Peninsula and The Venetian Macau and Four Season Macau on the Cotai Strip. Construction was halted last year on six hotel-casinos under development on Macau's Cotai Strip region, the second phase in what had been planned as a $12 billion, 20,000-room complex of hotels and casinos.
Las Vegas Sands employs about 20,000 in Macau, and the company would like to bring the work force to below 17,000. During the company's first-quarter earnings release, Leven said Las Vegas Sands hoped to save some $270 million in annual costs in Macau.
"It should be expected that Macau's casino operators will continue to adjust their work-force structure to address a softer Macau tourism market," Jonathan Galaviz, a partner at Las Vegas-based consultant company Globalysis Ltd., told Bloomberg News. "It's positive to see the company taking proactive steps to reduce unnecessary labor costs."
Leven said the job reductions are just one part of the company's cost-cutting efforts in Macau. The cost reductions, coupled with new investment and sales of noncore assets, such as The Venetian Macau's shopping mall, may give the company the money needed to restart construction on two of the Cotai Strip sites.
"By October, we'll know if we have the funds to finish sites five and six," said Leven. The sites would house hotel brands operated by Sheraton, St. Regis, Shangri La and Traders.
The job cuts in Macau are "a response to the opening of City of Dreams," said Gabriel Chan, a Hong Kong-based analyst at Credit Suisse Group AG.
Las Vegas Sands faces the prospect of increased competition when Melco Crown Entertainment Ltd. opens its $2.1 billion City of Dreams in the Cotai area.
"We are more positive about growth in Macau but given there is more competition in Cotai, if the top line is not growing, you will have to cut costs," Chan told Bloomberg.
Las Vegas Sands Chairman Sheldon Adelson told Bloomberg News the company was in talks with potential investors about investing in the Macau casinos.
Shares of Las Vegas Sands closed at $8.65 on the New York Stock Exchange on Wednesday, down $1.61, or 15.69 percent.
Contact reporter Howard Stutz at firstname.lastname@example.org or 702-477-3871.
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