Las Vegas Sands to fire up to 11,000 workers in Macau after resort projects halted
Jeremiah Marquez, AP Business Writer
Thursday November 13, 2008, 8:49 am EST
MACAU (AP) -- Struggling casino operator Las Vegas Sands Corp. will lay off as many as 11,000 workers after a cash crunch forced the company to halt construction on multibillion dollar projects in the Chinese gambling city, a top executive said Thursday.
About 2,000 of the construction workers are from Macau, and the remainder are from Hong Kong, mainland China and other countries, said Stephen Weaver, Sands' president for Asia.
The company would give preference to Macau workers and pay them as it assessed whether they could be relocated to other Sands' projects, though they would likely lose their jobs, Weaver said.
"Regrettably there will be people from Macau in the construction areas that we cannot continue to employ," Weaver told reporters at the company's Venetian resort in Macau.
On Monday, Sands said it was suspending several projects, in Macau and elsewhere, and had agreements to raise $2.14 billion in new capital, including new funding from its billionaire chief executive, Sheldon Adelson.
The announcement, amid worse-than-expected results for the third quarter, came after Sands said last week it was in danger of breaching lending conditions Dec. 31 and defaulting on $5.2 billion in credit facilities secured by its Las Vegas operations.
Macau has overtaken the Las Vegas Strip as the world's biggest gambling center, and American companies have been investing heavily in the former Portuguese colony on China's southern coast.
But Sands' construction on casino projects in Macau, Singapore, Pennsylvania and Las Vegas has put the company in a financing squeeze as falling revenue from gambling in Las Vegas made meeting its debt obligations more difficult.
The company said it would temporarily shut down two sites along Macau's Cotai Strip, including a Shangri-La/Traders hotel tower, a Sheraton hotel tower and three casinos.
The Macau sites have cost $1.16 billion so far, and represent a part of the company's $13 billion master plan to develop Cotai.
Sands is trying to arrange between $1.5 billion and $2 billion in financing to continue the projects, but Weaver said it's not clear how long that will take or when construction might resume.
He said he's confident the company will eventually go back to building the projects.
"We've got $1.2 billion sunk in to the ground, we're not going to walk away from it," he said. "I think there's no possibility that it's never going to start again."
Weaver wouldn't rule out the possibility of further layoffs in Macau.
"We can't promise that there won't be people that ultimately are laid off," he said. "But at this point no decision has been made."
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