Genting Malaysia Berhad to instigate second round of pay cuts

Asian casino operator Genting Malaysia Berhad is reportedly planning to implement a second round of temporary salary cuts in an attempt to reduce costs following a recent downturn in business caused by the ongoing coronavirus pandemic.

According to a Wednesday report from the Bloomberg news service, the Kuala Lumpur-listed firm has released an in-house memo that is asking some of its workers to agree to a policy that would see their pay packets shrunk by up to 20%. The company purportedly revealed that these diminutions are intended to run until May and could furthermore involve other members of staff being obliged to take one day off every week with no compensation.

Coronavirus consequences:

Genting Malaysia Berhad is responsible for the giant Resorts World Genting development in northern Malaysia and reportedly saw its domestic business decimated owing to a full three-month suspension that was brought in from March 19 as the local government sought to stop the spread of coronavirus. This led the firm’s aggregated revenues for the twelve months to the end of December to drop by over 56% year-on-year to around $1.11 billion and took its associated profit for the period down by 262% to a deficit of approximately $558 million.

Executive explanation:

The company also runs facilities in the United Kingdom, the Bahamas and the United States and reportedly explained that its senior management had already similarly agreed to take 20% pay cuts for the duration of the same period. Lee Choong Yan, President and Chief Operating Officer for Genting Malaysia Berhad, is one of those to have voluntarily consented to such a move and he purportedly used the memo to proclaim that the extraordinary scheme would help the operator to control its cost base so as to ‘ensure the sustainability of our business’ and protect jobs in the longer term.

Regretful repeat:

The news service reported that this is the second time Genting Malaysia Berhad has asked its employees to take transitory pay cuts following the initiation of a similar plan in April after the first wave of the coronavirus pandemic had partially subsided. This move was purportedly unprecedented in the company’s 55-year history although it was followed by an encouraging third quarter in which sequential profits improved by 21.3% to a deficit of about $178.43 million.

Ensuing impediment:

However, all of this work was reportedly largely undone in January when Genting Malaysia Berhad was forced to shutter its Resorts World Genting for a second time owing to the introduction of a fresh range of coronavirus-related border closures and movement restrictions. This latter move was lifted from February 16 although numerous industry experts now purportedly predict that business at the hilltop development is likely to remain subdued for at least several more months despite the initiation of a vaccine program.