Star Entertainment has begun cutting senior roles as part of a broad internal restructure designed to reduce costs.
Star Entertainment is reported to be cutting as many as 40 senior roles, as part of a broad internal restructure designed to reduce costs ahead of the expected takeover by Bally’s and the Mathieson family.
The changes come as the casino operator continues to address sustained financial pressures and ongoing regulatory scrutiny.
Unidentified sources told the Australian Financial Review (AFR) that approvals for the proposed investments from Bally’s and the Mathieson family, the company’s largest existing shareholder, could be completed as early as this week.
Bruce Mathieson was confirmed as a non-executive director of Star in October.
holders endorsed the A$300m transaction five months ago, and final clearance would enable the new controlling investors to assume formal oversight of the company.
Star CEO Steve McCann informed staff of the restructuring on 10 November, outlining that the group was adjusting its organisational model to improve operations and prepare the business for future demands.
His update stated that the company remained focused on stabilising performance, despite financial and environmental challenges.
McCann told employees that job losses would occur, but said the business would also recruit in new areas as part of its long-term plan.
Investors reportedly not behind cuts
Star did not comment on the changes. AFR said the cuts were not directed by the incoming major shareholders, who have nonetheless indicated they intend to push significant operational changes once in control.
Earlier this year, Bally’s chairman Soo Kim said Star required new leadership, arguing that the business had suffered from prolonged mismanagement.
His remarks underscored a belief that the company needed to eschew previous practices to arrest its declining performance.
Star’s financial difficulties have stemmed from repeated breaches of anti-money-laundering and counter-terrorism laws, which resulted in substantial fines, regulatory sanctions and the suspension of its Sydney casino licence.
These issues also contributed to a sharp decline in high-spending visitation, weakening revenue across its properties in Sydney, Brisbane and the Gold Coast.
For the financial year ending 30 June, Star reported revenue of A$1.4bn, down 19% year-on-year, including a 22% fall in Sydney.
The company recorded a statutory net loss of A$427.7m, or A$215.5m before one-off items such as penalties, redundancies and an impairment tied to the Queen’s Wharf project.
Net debt stood at A$207.1m. The company is awaiting a further penalty for compliance breaches, which it has previously said could threaten its viability, and is negotiating to refinance A$430m in debt through a new lender group.