Wynn Resorts Refuses to Lay Off Workers

The concept that service is of overriding importance in the casino industry does not always seem in the grasp of the top decision makers.

Steve Wynn is going against the current grain of the casino industry by refusing to allow economic conditions to force layoffs throughout Wynn Resorts. During a conference call this week to discuss earnings, Wynn strongly rejected the idea of employee layoffs, noting the need for strong service standards in hard times.

Harrah's Entertainment and Station Casinos have both announced staff reductions and layoffs, following MGM Mirage's termination of 440 managers in its company. As revenues have declined, companies have looked to cut salaries as a way to keep earnings high.

Despite having had spates of labor troubles recently due to a controversial tip-share policy for dealers, Wynn showed the understanding of the business that has kept him an industry leader for decades. He stated, "We consider the morale and feeling of security our employees have is the most important asset the company owns. More than our buildings or even our concessions." 

The concept that service is of overriding importance in the casino industry does not always seem in the grasp of the top decision makers. Wynn clearly understands the possible deleterious effects layoffs can have on service and performance, reaching far beyond the individuals losing jobs.

Employee confidence and morale are affected by layoffs, as those who remain areabsorbed by the prospect that their jobs are next to go. Short staffing and distracted workers result in patrons not receiving the top notch treatment that causes them to return, and thus revenue continues to drop.

Knee-jerk reactions and mass layoffs cause the problems suffered by the worst industry example in recent times, Columbia-Sussex. The fate of the Tropicana awaits those who make short-sighted moves to pinch penies in billion-dollar, long-term businesses.

As Wynn noted, "My colleagues and I are paid to run hotels in good times and fair times. I don't give a damn about the short-term market implications."