Macau 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 this week.
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 employee,“ 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 USD 2.14 billion in new capital.
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 December 31 and defaulting on USD 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 gamblers and the credit crisis made it difficult to meet its debt obligations.
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 USD 1.16 billion so far, and represent a part of the company’s USD 13 billion master plan to develop Cotai.
Sands is trying to arrange between USD 1.5 billion and USD 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 USD 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.“