The supervisory board of Casinos Austria has approved a proposal from the business’ management team for a far-reaching restructuring plan through which it aims to reduce costs by more than €40m, but which will see its employee headcount significantly reduced.
The restructuring, known as the ReFIT plan, was described by Casinos Austria chief executive Bettina Glatz-Kremsner as “the largest reorganisation in the history of the company”.
“[It will] secure Casinos Austria's position as the number one Austrian gaming provider in the long term,” Glatz-Kremsner said.
The ReFIT plan aims to ensure all of the business’ 12 casino locations can be maintained and generate a profit, and to secure as many jobs as possible at each location.
The operator will look to develop a more efficient business through a restructuring of its casino operations and headquarters, while realising cost savings of more than €40m by reducing material and personnel costs. This will mean a reduction in the number of employees at the business, with average salary costs to also be cut.
While Casinos Austria did not provide an indication as to how many staff may be laid off, Austrian newspaper Kurier claims up to 500 employees will lose their jobs.
The casino estate will undergo a “strategic reorientation” which will give each property greater autonomy, as well as creating a “lean, independent” head office structure.
Glatz-Kremsner explained that the business had been badly hit by the novel coronavirus (Covid-19) pandemic, which shuttered the venues from 16 March. The properties reopened their doors to customers from 29 May.
“Like many other companies, Casinos Austria was massively affected by the coronavirus crisis, which made it necessary for the management, supervisory board and owners to act quickly and responsibly; particularly because the expected consequences of Covid-19 will also present us with great difficulties in the near future,” she said.
“But even before the coronavirus crisis, there was a clear need for action due to changing conditions in our casinos and also at our headquarters, not least because of the smoking ban.”
Austria banned smoking in public places from 1 November last year.
The plan is supported by Casinos Austria’s majority shareholder Sazka Group, which completed a deal to take its stake in the operator to 55.48% in June this year. It jointly manages the business alongside the Austrian state’s investment arm, Österreichische Beteiligungs (ÖBAG), through an agreement struck in March.
“It's not about politics or the nationality of the shareholders, and it’s not about maximising profits,” Sazka chief executive Robert Chvatal said. “Restructuring is about avoiding future losses. It’s about rescuing a company that finds itself in an extraordinarily difficult situation due to its structure and a changing world.
“We do not want to sell casinos, but we want to make them fit for the future,” he continued. “We support the ReFIT recommendation from the team of experts led by Bettina Glatz-Kremsner, who worked hard on this plan for several weeks.”
Chvatal described the plan as being based on “facts, figures and great judgement”, and said it would save 1,200 jobs across the business.
ÖBAG board member Thomas Schmid added that his company had been particularly focused on preserving as many jobs as possible, and keeping all 12 casinos open for business.
“Management has assured us that in view of the major challenges facing [Casinos Austria, the restructuring of the company is essential,” he explained. “Only by implementing the proposed measures can the company remain successful.
“Casinos Austria is an important company in ÖBAG's portfolio, and as a major tourism leader and taxpayer, the company makes a significant contribution to Austria as a business location. The long-term increase in the value of the investment – as well as player protection – are central cornerstones of a successful corporate strategy for Casinos Austria.”
With the ReFIT plan approved by the supervisory board, efforts to implement its terms are now underway. This will see internal project and working groups formed to fulfil this, and tasked with exploring further opportunities for additional efficiencies and savings.
Discussions will also begin with employee representatives over potential layoffs.
“It is important to us to implement the planned measures in a socially acceptable manner and with the involvement of the works council,” Schmid said.
Glatz-Kremsner admitted that the coming weeks would be “challenging and difficult”.
“However, if the present concept is successfully implemented, not only will the company be stronger and more successful than it has ever been, but the outstanding position of Casinos Austria and the jobs associated with it will also be secured,” she said.
“The employees are doing an excellent job and have always proved in the past that they are prepared to act for the good of the company.”